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Proceedings of the 

First Pan American Financial 

Conference 



CONVENED BY AUTHORITY OF THE 
CONGRESS OF THE UNITED STATES 

UNDER THE DIRECTION OF 

HON. WILLIAM G. McADOO 

Secretary of the Treasury 



Washington 
May 24 to 29, 1915 







WASHINGTON 
GOVERNMENT PRINTING OFFICE 

1915 






D. of D. 
FEB 19 1916 



SO 






TABLE OF CONTENTS. 



Page. 
I. Letter to the President of the United States from the Secretary of 
the Treasury, transmitting the proceedings of the Pan American 

Financial Conference 5 

II. Report of the Secretary General of the Pan American Financial 

Conference to the Secretary of the Treasury 21 

III. Program of the Conference and list of questions submitted by the 

Secretary of the Treasury for consideration of the Conference— 35 

IV. Proceedings of the General Sessions of the Pan American Financial 

Conference , S3 

Opening session — Monday morning, May 24, 1915 85 

Second session — Monday afternoon, May 24, 1915 111 

Third session — Tuesday morning, May 25, 1915 145 

Fourth session — Thursday morning, May 27, 1915 191 

Fifth session— Friday afternoon, May 28, 1915 ^ 229 

Sixth session — Saturday morning, May 29, 1915 247 

Seventh session — Saturday afternoon, May 29, 1915 269 

V. Reports of General Committees 297 

VI. Reports of Group Committees 311 

VII. Addresses and responses made at banquet tendered to the delegates 
to the Pan American Financial Conference by the Secretary of 

the Treasury 469 

VIII. Notes on the trip of the delegates at the conclusion of the Con- 
ference 491 

IX. Cablegram sent by the President of the United States to the Presi- 
dents of the Latin American countries represented at the Con- 
ference and replies thereto 505 

X. Letter from the Secretary of the Treasury to the delegates regard- 
ing the future of the work initiated by the Conference 515 

XL Permanent committee appointments made by the Secretary of the 

Treasury 525 

United States members of the International High Commission. 
Committee on Return Visit. 

United States members of Permanent Group Committees. 
XII. Memoranda on financial and commercial conditions in Latin 

America submitted to the Conference 533 

3 



LETTER TO THE PRESIDENT OF 
THE UNITED STATES FROM THE 
SECRETARY OF THE TREASURY 
TRANSMITTING THE PROCEED- 
INGS OF THE PAN AMERICAN 
FINANCIAL CONFERENCE 



LETTER TO THE PRESIDENT OF THE UNITED STATES FROM THE 
SECRETARY OF THE TREASURY TRANSMITTING THE PROCEED- 
INGS OF THE PAN AMERICAN FINANCIAL CONFERENCE. 



Treasury Department, 

Washington, September 6, 1915. 

Sir: The diplomatic and consular appropriations bill approved 
March 4, 1915, contained the following provision : 

"The President is hereby authorized to extend to the 
Governments of Central and South America an invitation 
to be represented by their ministers of finance and leading 
bankers, not exceeding three in number in each case, to at- 
tend a conference with the Secretary of the Treasury in the 
city of Washington, at such date as shall be determined by 
the President, with a view to establishing closer and more 
satisfactory financial relations between their countries and 
the United States of America, and authority is hereby given 
to the Secretary of the Treasury to invite, in his discretion, 
representative bankers of the United States to participate in 
the said conference, and for the purpose of meeting such 
actual and necessary expenses as may be incidental to the 
meeting of said conference and for the entertainment of the 
foreign conferees the sum of $50,000 is hereby appropriated, 
out of any money in the Treasury not otherwise appropri- 
ated, to be expended under the direction of the Secretary of 
the Treasury." 

In pursuance thereof the Secretary of State extended in your be- 
half an invitation to the various South and Central American Ee- 
publics to attend a conference with the Secretary of the Treasury in 
the city of Washington on the 24th day of May, 1915. This invita- 
tion was cordially received and accepted by all of the Governments 
concerned. Following is a list of the Governments represented, with 
the names of the delegates appointed by them to attend the con- 
ference : 

7 



8 



PAN AMERICAN FINANCIAL CONFERENCE. 



Argentina:* 

Sefior Dr. Samuel Hale Pearson. 

Sefior Dr. Ricardo C. Aldao. 

Sefior Dr. V. Villamil. 
Bolivia : 

Sefior Dr. Ignacio Calderon. 

Sefior Dr. Adolfo Ballivian. 
Brazil : 

Senhor Dr. Amaro Cavalcanti. 
Chile : 

Sefior Dr. Luis Izquierdo. 

Sefior Dr. Augusto Villanueva. 

Sefior Dr. Gonzalo Vergara Bulnes. 
Colombia : 

Sefior Dr. Santiago Perez Triana. 

Sefior Dr. Roberto Ancizar. 
Costa Rica : 

Sefior Dr. Mariano Guardia 

• Carazo. 

Sefior Dr. John M. Keith. 
Cuba: 

Sefior Dr. Pablo Desvernine y 
Gald6s. 

Sefior Dr. Porfirio Franca y Al- 
varez de la Campa. 

Sefior Dr. Octavio Zayas y Adan. 
Dominican Republic : 

Sefior Dr. Francisco J. Peynado. 

Sefior Dr. Enrique Jimenez. 
Ecuador : 

Sefior Dr. Juan Cueva Garcia. 

Sefior Dr. Vicente Gonzales B. 

Sefior Dr. Enrique Gallardo. 

The Secretary of the Treasury was authorized to invite, in his 
discretion, representative bankers of the United States to participate 
in said conference. In the exercise of that discretion I extended 
invitations to a representative body of our bankers and business men. 
A list of them will be found on page 44 of the proceedings of the 
conference. 

The members of the diplomatic corps of the Latin American 
Eepublics, the members of the Cabinet of the United States, the 
chairman of the Committee on Foreign Relations of the Senate (Hon. 
William J. Stone), the chairman of the Committee on Foreign Af- 
fairs of the House of Representatives (Hon. Henry D. Flood), the 
Assistant Secretaries of the Treasury, the members of the Federal 
Reserve Board, the members of the Federal Trade Commission, and 
the chairmen of the boards of directors and the governors of each of 
the Federal reserve banks were also invited. 



Guatemala : 

Sefior Dr. Victor Sanchez Ocana. 

Sefior Dr. Carlos Herrera. 

Sefior Dr. Juan S. Lara. 
Honduras : 

Sefior Dr. Leopoldo C6rdova. 

Sefior Dr. Daniel Fortm. 
Nicaragua : 

Sefior Dr. Pedro Rafael Cuadra. 

Sefior Dr. Albert Strauss. 

Sefior Dr. Clifford D. Ham. 
Panama : 

Sefior Dr. Aristides Arjona. 

Sefior Dr. Ramon F. Acevedo. 

Sefior Dr. Ramon Arias, jr. 
Paraguay : 

Sefior Dr. Hector Velazquez. 

Sefior Dr. William Wallace 
White. 
Peru: 

Sefior Dr. Isaac Alzamora. 

Sefior Dr. Eduardo Higginson. 
Salvador : 

Sefior Dr. Alfonso Quifi6nez M. 

Sefior Dr. Jose E. Suay. 

Sefior Dr. Roberto Aguilar. 
Uruguay : 

Sefior Dr. Pedro Cosio. 

Sefior Dr. Gabriel Terra. 

Sefior Dr. Carlos Maria de Pena. 
Venezuela : 

Sefior Dr. Pedro Rafael Rincones. 



* Dr. Villamil and Mr. John E. Zimmermann attended the conference as representa- 
tives of the Buenos Aires Chamber of Commerce. 



LETTER FROM THE SECRETARY OF THE TREASURY. 9 

Through the courtesy of the Governing Board of the Pan Ameri- 
can Union the Conference was held in the Pan American Building 
in the city of Washington. The first session began at 10 o'clock a. m., 
Monday, the 24th of May, 1915. The Secretary of the Treasury pre- 
sided, and the proceedings were opened with addresses by the Presi- 
dent and Secretary of State of the United States, to which responses 
were made by representatives of the visiting Governments. The 
sessions continued until the 29th of May, 1915. 

A full report of the proceedings is submitted herewith. I shall not 
attempt to review these proceedings; I shall merely summarize the 
most important results. 

There was unanimous opinion that two things are essential to the 
development of trade and improved relations between the Latin- 
American nations and the United States, viz : 

1. The granting by United States bankers and business 
men of ample credits to Latin America and the prompt pro- 
vision of the necessary organization and facilities for this 
purpose. 

2. The prompt establishment of adequate steamship fa- 
cilities between the leading ports of the United States and 
South America, which the Conference, by resolution, de- 
clared " a vital and imperative necessity." 

As to the first of these necessities, viz, credits : Central and South 
America have, heretofore, relied almost wholly on Europe for their 
financial requirements. The great war has seriously disturbed and 
injured those countries by the sudden derangement and withdrawal 
of European credits. United States credits must be substituted 
if the orderly development and progress of Latin America is to con- 
tinue, and if we desire to enlarge the trade and financial influence 
of the United States in those countries. 

Manifestly enlightened interest in the welfare of our friendly 
neighbors should induce us to extend to them every facility that our 
resources will permit. Such a policy will inure to their and our 
advantage. 

It is nothing short of providential that the Federal Eeserve system 
has been established. Happily it offers the means by which the great 
objects in view can be largely, if not wholly, attained. The Federal 
Eeserve Act has so consolidated and organized our credit resources 
that our bankers are, for the first time in our history, able to engage in 
world-wide financial operations. We now have the available re- 
sources. It is merely a question of their intelligent use. 

The first step should be the establishment of the necessary branches 
or agencies in the leading cities of all of the countries of South and 



10 PAN AMERICAN FINANCIAL CONFERENCE. 

Central America by a bank or banks having the necessary resources 
to take the business that is open to them. One of our largest banks 
has had the enterprise to establish branches in some of the largest 
cities in South America, but manifestly the resources of a single bank 
or of several of our largest banks are insufficient to meet the demands 
of the situation as it now exists and as it will develop in the future. 
What is needed is the use of the consolidated banking power of the 
United States applied through agencies established in the leading 
cities of Latin America. 

The Federal Reserve Act has supplied the necessary authority, and 
it only remains for the Federal Reserve banks, with the approval of 
the Federal Reserve Board, to make practical use of that power. Sec- 
tion 14 (paragraph e) of said act gives every Federal Reserve bank 
the right — 

" To establish accounts with other Federal Reserve banks 
for exchange purposes and, with the consent of the Federal 
Reserve Board, to open and maintain banking accounts in 
foreign countries, appoint correspondents, and establish 
agencies in such countries wheresoever it may deem best for 
the purpose of purchasing, selling, and collecting bills of 
exchange, and to buy and sell with or without its indorse- 
ment, through such correspondents or agencies, bills of ex- 
change arising out of actual commercial transactions which 
have not more than ninety days to run and which bear the 
signature of two or more responsible parties." 

In addition to these powers, the Federal Reserve hanks may, " under 
rules and regulations prescribed by the Federal Reserve Board, pur- 
chase and sell in the open market, at home or abroad, either from or 
to domestic or foreign banks, firms, corporations, or individuals, 
cable transfers and bankers' acceptances and bills of exchange of 
the kinds and maturities by this act made eligible for rediscount with 
or without the indorsement of a member bank," and may " deal in 
gold coin and bullion at home or abroad, make loans thereon," etc., 
and " buy and sell, at home or abroad, bonds and notes of the United 
States," etc. Enlargement of these powers would be (Jesirable to 
increase the usefulness of foreign agencies of Federal Reserve banks 
and it is probable that the Congress would grant such enlarged 
powers upon good cause shown. 

The twelve Federal reserve banks could, with the consent of the 
Federal Reserve Board, establish joint agencies in each of the coun- 
tries of Latin America, their interest in such agencies to be in propor- 
tion to the capital stock and surplus of each participating Federal 
Reserve bank. The combined capital stock and resources of our Fed- 
eral Reserve banks, utilized in this way for the extension and pro- 
motion of our foreign commerce, would give them unrivaled financial 
power. They could maintain themselves in foreign fields in competi- 



LETTER FROM THE SECRETARY OF THE TREASURY. 11 

tion with the world and perform a service of incalculable value to 
the American people. 

During the Pan American Financial Conference the suggestion 
was made by some of our leading bankers that the national-bank act 
might be amended so as to permit a number of the national banks 
to become stockholders in an independent bank organized for the 
purpose of doing business in foreign countries. This plan, even if 
it were not open to objection, would be manifestly inferior to the 
agency of the combined Federal Reserve banks. The Federal Eeserve 
banks comprise in their membership every national bank in the 
United States, as well as a number of our leading State banks and 
trust companies. They constitute a financial organization of un- 
equaled strength, and their operations in foreign countries will be 
for the common benefit of all of the national banks, State banks, and 
trust companies composing the Federal Eeserve system. These agen- 
cies in foreign countries could, in addition to their banking business, 
render a great service to American business men and bankers by 
furnishing credit reports and general information about trade and 
finance in the various countries in which they operate. 

The power of the Federal Reserve banks to establish such joint 
agencies in foreign countries, with the consent of the Federal Reserve 
Board, appears to be beyond question. Tta initiative rests with the 
Federal reserve banks. While they can not be compelled to estab- 
lish such agencies, I believe that upon a careful study of the situa- 
tion and with the encouragement of the Federal Reserve Board 
they will be prompted to take this important step. 

The establishment of Federal Reserve agencies will not prevent the 
member banks from carrying on and enlarging the business they are 
now doing in foreign countries. It is gratifying to note that many 
of our national banks and trust companies are showing commendable 
enterprise in supplying credits to Latin America. 

As to the second necessity, namely, the establishment of adequate 
steamship facilities: The Pan American Financial Conference, by 
unanimous vote, adopted the following resolution : 

" Resolved, That it is the sense of this Conference that im- 
'T proved ocean transportation facilities between the countries 
composing the Pan American Union have become a vital 
and imperative necessity, and that every effort should be 
made to secure, at the earliest possible moment, such im- 
proved means of ocean transportation, since it is of primary 
importance to the extension of trade and commerce and im- 
proved financial relations between the American Republics." 

The Committee on Transportation filed a report recommending, 
among other things, that the Secretary of the Treasury of the United 
States, as chairman of the Conference, appoint a permanent com- 



12 PAN AMERICAN FINANCIAL CONFERENCE. 

mittee, to be composed of representatives of the United States and 
Argentina, Brazil, Uruguay, Chile, Ecuador, and Peru, " to obtain 
and furnish information pertinent to the subject, and to put into 
effect the plans outlined in the reports of the subcommittees above 
alluded to, and, further, to consider and report to the chairman of 
the Pan American Financial Conference any other feasible and ef- 
fective plan for the establishment of the desired expansion of ship- 
ping facilities." There were two subcommittees of the Transporta- 
tion Committee, each of which presented a report containing recom- 
mendations. The report of Senores Aldao, Cavalcanti, and Cosio 
representing, respectively, Argentina, Brazil, and Uruguay, sug- 
gested the advisability of calling for bids not later than December 
31, 1915, for the establishment of a regular line of fast mail steamers 
between United States ports and Rio de Janeiro, Montevideo, and 
Buenos Aires, " bidders to state the compensation demanded and the 
period of the contract," and subject to other conditions outlined in the 
report, and concluded as follows: 

" the governments of the respective countries to agree upon 
the proportion which is to be paid by each and upon all 
other details." 

The report of Senor Vergara, representing Chile, recites that the 
delegate of Peru, Dr. Alzamora, and the delegate of Ecuador, Dr. 
Gonzales, although approving his report, could not sign the same 
for want of the necessary authorization from their Governments. 
Sefior Vergara's report recommends the organization of a large com- 
pany, subscription to the capital stock of which may be made by 
the public, the balance of the stock, if any, to be taken by the Gov- 
ernment of the United States and the Governments of those Latin 
American Republics interested, in proportions to be agreed upon; 
the company to be organized under New York laws ; the steamers to 
be registered in the different countries in proportion to the capital 
subscribed, and to fly the flag of the country of their registration. 
It is unnecessary to recite the other features of the report, as it is 
the principle that is important. 

I stated to the conference that I did not think it wise to appoint 
the International Committee on Transportation, as suggested, be- 
cause I should, as Secretary of the Treasury of the United States, 
have to appoint a committee composed of representatives of foreign 
countries to deal with matters in their own States; that I did not 
believe it practicable, and that it seemed to me that each country 
would have to handle the matter in its own way; that this was not 
a convention for the purpose of determining national policies, but a 
conference for the purpose of exchanging views and suggesting 



LETTER FROM THE SECRETARY OF THE TREASURY. 13 

remedies; that we could not with propriety discuss Government 
ownership or subsidies or any other such matter; that the shipping 
question had become something of a political controversy in the 
United States, and that the conference was not the place to thresh it 
out ; that I thought the conference should confine itself to a consider- 
ation of the resolution to which I have already referred, and which 
was unanimously adopted by the conference. I respectfully invite 
your attention to pages 283, 284, and 290 of the proceedings and to 
the report of the committee on transportation, which will be found 
on page 305 of the proceedings. 

It is appropriate to quote, briefly, from the remarks of Dr. Samuel 
Hale Pearson, of Argentina, chairman of the Committee on Trans- 
portation, who said : 

" It has been the unanimous opinion of all of us North 
Americans and South Americans that there is absolute ne- 
cessity, in the interest of commerce and for a better knowl- 
edge of each other, that some method be arrived at for the 
establishment of fast steamship communications between 
North and South America. * * * Everybody knows that 
we want fast steamers, and fast steamers are the basis and 
the foundation of banking, trading, and all sorts of com- 
mercial relations. It is useless — I mean it is a little pre- 
mature — for us to try to establish commercial relations if we 
find we can not get there. The first thing is to get there, 
and then business will follow." 

The question of adequate steamship facilities is fundamental and 
underlies every other question concerning our trade and future rela- 
tionships with the Latin American Eepublics. The ability to com- 
municate promptly with each other, at frequent intervals, and at 
reasonable rates, is a prerequisite. It is too obvious to need discus- 
sion that without the required facilities trade can not be built up or 
financial relationships be established or friendly intercourse be 
promoted. 

The quick and effective solution of this problem is for the Govern- 
ment of the United States to put itself behind a shipping enterprise, 
so that the necessary financial support to make it successful will be 
assured. It is an undertaking of such magnitude that the Govern- 
ment alone has the resources and the power to act quickly and to 
compass it. We can not reasonably expect private capital in this 
country to engage in this essential undertaking. It is too big an un- 
dertaking at the outset for private capital. Moreover, the claim is 
made that our navigation laws must be amended, or that subsidies 
or subventions must be granted, or that one or all of these things 
must be done before private capital can be encouraged to engage in 
shipping enterprises. But if any or all of these things should be 



14 PAN AMERICAN FINANCIAL CONFERENCE. 

done, there is no assurance or guarantee, nor can any be had, that 
private capital in sufficient amount will come forward quickly and 
provide the steamship facilities for which the trade and commerce 
of this country and of Central and South America are acutely suf- 
fering. The shipping field has for many years failed to attract Amer- 
ican capital which will have to be educated to shipping enterprises, no 
matter what laws may be passed by the Congress. This will take a 
long time. The evolution of an adequate merchant marine through 
private capital will be extremely slow and painfully uncertain if it 
evolves at all. Meantime our great opportunity to serve our South 
American friends and promote our own interests may be irretrievably 
lost. 

I am informed by the Navy Department that, in order to bring 
our present Navy up to its maximum usefulness and efficiency in time 
of war, there is needed 400 merchant vessels of approximately 
1,172,000 gross tonnage of varied character and requirements ; that in 
addition to this, " should our own coast be invested or even occasionally 
visited, there would be required a large number of small vessels fitted 
for mine sweeping, say, 324 of such vessels of about 150 gross tons 
each." We have only a small portion of the required tonnage in suit- 
able merchant vessels of the larger units registered under our flag. 
This does not take into account future growth of our Navy, for which 
additional provision must be made. In case of war, if that misfor- 
tune should ever overtake us, our Navy would be seriously handi- 
capped for the want of essential naval auxiliaries unless we take 
prompt steps to create them. It would seem to be the part of wis- 
dom and intelligence for the Government of the United States to 
create, promptly, by construction and purchase, a fleet of merchant 
vessels suitable for naval auxiliaries and to operate these vessels in 
time of peace for the purpose of extending our commerce throughout 
the world, and creating the trained seamen upon whose skill and 
valor we must depend for the operation of these ships and the de- 
fense of our country in time of war. It is mere assertion to say that 
these vessels can not be operated in commerce at a profit ; but even if 
this be conceded and the ships should be operated at a loss, which 
must be borne by the Treasury, this loss will be a small price to pay 
for the extension of our commerce and the defense of our country. 
It is claimed that a naval auxiliary composed of merchant vessels 
is just as essential to make our Navy fully effective as the gnns on 
the decks of our warships and the men behind those guns. If this 
is true, it is the duty of the Government to provide these naval 
auxiliaries without delay. Once provided, the cost of maintaining 
them idle would be a great expense and charge upon the Treasury, 
but even that expense would be justified in the light of necessity. 



LETTER FROM THE SECRETARY OF THE TREASURY. 15 

But how much more intelligent would be the policy of operating 
these naval auxiliaries in time of peace as merchant ships for the 
expansion of our commerce throughout the world, and applying their 
earnings in mitigation of the cost of maintenance. The net loss if 
any, would be a small price to pay for security, while a profit' if 
earned, might go into the general fund of the Treasury in reduction 
ot taxation or be used as an improvement fund for the purchase of 
additional ships. Is not our wisest course to create the necessary 
naval auxiliary and use it at the same time as a merchant marine for 
our South American and foreign trade? 

I am satisfied that the Governments of South America to whose 
ports an American company, backed by our Government, should run 
ships will offer every possible encouragement in the way of port 
facilities, favorable port charges, regulations, etc. In my letter to 
the delegates, dated June 19, 1915 (page 515 of the proceed- 
ings), I have asked each Government for some useful information 
about shipping, which will be submitted in a separate report as soon 
as received. 

While it was not expected when the Pan American Financial Con- 
ference was conceived that the shipping question would be considered 
by that conference, it was, in the light of subsequent events, inevitable 
that it should be discussed because of its paramount importance and 
imperative necessity. 

Next in importance to credits and shipping facilities was the sub- 
ject of uniformity of laws. A committee consisting of representa- 
tives of every country represented in the Conference was appointed 
Its report will be found on page 297 of the proceedings. The 
, committee recommended that uniformity of laws be considered as 
\ to the following subjects: 

1. The establishment of a gold standard of value. 

2. Bills of exchange, commercial paper, and bills of lading 

3. Uniform (a) classification of merchandise, (5) customs regula- 
tions (c) consular certificates and invoices, (d) port charges. 

4. Uniform regulations for commercial travelers. 

5 To what extent further legislation may be necessary concerning 
trade-marks, patents, and copyrights. 

6. The establishment of a uniform low rate of postage and of 
charges for money orders and parcels post between the American 
countries. 

7. The extension of the process of arbitration for the adjustment 
ot commercial disputes. 

•The committee also recommended that, for the purpose of bringing 
about uniformity of laws on these subjects, " there be established an 
international high commission, to be composed of not more than 



16 PAX AMERICAN FINANCIAL CONFERENCE. 

nine members, resident in each country, to be appointed by the min- 
ister of finance of such country. The aggregate members thus ap- 
pointed shall constitute the commission." This report was unani- 
mously adopted by the Conference, and in pursuance thereof I have 
appointed a commission to represent the United States, and have 
(upon the informal suggestions subsequently made in the Conference 
that the minister of finance or secretary of the treasury of each 
country act as chairman of the commission of his country) assumed 
the chairmanship of the United States Commission, which is com- 
posed of the following : 

William G. McAdoo, Secretary of tlie Treasury, chairman, Washington, 
D. C. 

John Bassett Moore, vice chairman, Columbia University, New York, 
N. Y. 

John H. Fahey, president Chamber of Commerce of the United States, 
Boston, Mass. 

Duncan U. Fletcher, president Southern Commercial Congress, Jackson- 
ville, Fla. 

D. R. Francis, St. Louis, Mo. 

B. H. Gary, chairman of board, United States Steel Corporation, New 
York, N. Y. 

A. B. Hepburn, chairman board of directors, Chase National Bank, New 

York, N. Y. 
George M. Reynolds, president Continental and Commercial National 

Bank, Chicago, 111. 
Samuel Untermyer, New York, N. Y. 

I have also appointed the following : 

Leo S. Rowe,' Secretary General. 

J. Brooks B. Parker, Assistant Secretary General. 

C. E. McGuire, Assistant to the Secretary General. 

As this report is written the Governments of Bolivia, Chile, Cuba, 
Ecuador, Panama, and Peru have appointed high commissions for 
their countries, and I am encouraged to believe that the remainder 
of the countries represented in the conference will soon take similar 
action. 

The commission for the United States has, of course, no official 
status at the present time, but the work upon which it has entered is 
of such great importance that I earnestly recommend that you request 
the Congress to give its approval and make a small appropriation 
to enable the commission to meet the necessary expenses of carrying 
on its labors. The task is both big and difficult, and skilled services 
will be required. A modest appropriation will be sufficient. I 
recommend that the sum of $25,000 be granted. 

In my parting letter to the delegates of the Governments partici- 
pating in the conference, dated June 19, 1915 (page 515 of the pro- 
ceedings) , I suggested that a meeting of the International High Com- 



LETTER FROM THE SECRETARY OF THE TREASURY. 17 

mission be held in Buenos Aires on the 1st day of November, 1915. 
The time may be too short to hold this meeting. In that event a later 
date will be announced. It is highly desirable that as rapid progress 
as possible be made in bringing this great task to completion. 

There are many laws and regulations of the various countries 
which adversely affect trade and enlarged intercourse between them. 
It is manifestly to the interest of all of these countries that these 
difficulties be removed. Uniformity of laws affecting the funda- 
mentals of trade and finance can undoubtedly be realized with patient 
work and earnest cooperation. I believe that as a result of the Pan 
American Financial Conference all of the Governments concerned 
are now fully aroused to the importance of securing uniformity of 
laws as far as practicable, and that their hearty cooperation is 
assured. The Postmaster General of the United States has given his 
cordial indorsement to the principle of uniform low rates of postage 
and charges for money orders and parcels post between the Latin 
American countries and the United States, and is giving the Inter- 
national High Commission for the United States invaluable as- 
sistance. 

Another subject of very great importance is the need of direct 
cable communications and reasonable rates between the Latin Ameri- 
can countries and the United States. This was emphasized by many 
delegates in the conference. There is no doubt about the disad- 
vantages under which all of the countries of Latin America and the 
United States labor on account of the present roundabout and un- 
satisfactory facilities and the excessive cost of cable communication 
between them. If the Congress shall grant the suggested appropria- 
tion for the work of the International High Commission, it will be 
entirely feasible for that commission to investigate this question and 
ascertain and report to what extent such facilities are needed and how 
far the various South and Central American Governments will co- 
operate in establishing them. 

Recognizing the fact that each of the countries represented in the 
Conference had its own distinctive problems, which were unrelated 
to those of its neighbors, and that a discussion of the problems of 
each country in the general sessions of the Conference would be unde- 
sirable, if not impracticable, a series of group conferences were ar- 
ranged in the following manner : 

The representatives of the United States were divided into eighteen 
groups, one of which was assigned to each of the countries represented 
in the Conference. Thus the delegates of each foreign country were 
brought into contact with a group of our most prominent bankers 
and business men and were able to discuss freely and intimately the 
problems involved. 

98257°— 15 2 



18 PAN AMERICAN FINANCIAL CONFERENCE. 

This plan was carried out with highly satisfactory results. The 
reports of these group conferences are published in full in the accom- 
panying proceedings, and contain a vast amount of information 
which will prove of great value in the promotion of better financial 
and commercial relations between the Latin- American Republics and 
the United States. 

It is clear that it is to the interest of all of the countries that these 
group committees shall be continued in order that the work begun in 
the conference may be carried forward without interruption. I have 
appointed, therefore, eighteen group committees in this country, and 
have assigned one of them to each of the Central and South American 
countries, thus making permanent the plan adopted with so much 
success during the sessions of the conference itself. These commit- 
tees have, of course, no official status and involve no expense to the 
Government, but will act as voluntary organizations for the purpose 
of fostering cioser financial and commercial relations between the 
United States and Latin America. The committees will serve until 
the Pan American Financial Conference of 1916 (if one shall be held 
that year), unless sooner relieved from further service by the Secre- 
tary of the Treasury of the United States. I have suggested that the 
delegates from the various Latin American countries continue as 
group committees for their respective countries, so that they can 
cooperate with the group committees of this country in furthering the 
objects of the conference. A list of the group committees so ap- 
pointed will be found on page 528 of the proceedings. 

A resolution was adopted by the foreign delegates to the Confer- 
ence inviting American bankers and business men to visit the various 
Central and South American countries. In conformity therewith I 
have appointed a committee of business men and bankers in this 
country to arrange the proposed visit. This committee has likewise 
no official status, nor is such a status sought or needed. The object 
of this committee will be to arrange the itinerary and select a repre- 
sentative body of our business men and bankers who are willing, at 
their own expense, to make the proposed trip. No appropriation 
for this purpose is asked of the Congress. A list of the committee 
so appointed will be found on page 527 of the proceedings. I 
am glad to say that this committee has taken hold of the work with 
great enthusiasm and that preparations are now being made for the 
proposed visit. 

The results of the Pan American Financial Conference were so 
satisfactory that I am convinced that it will be of great advantage 
to all of the Republics of the American continent to hold an annual 
Pan American Financial Conference in Washington. I have sug- 
gested to the various Governments that the city of Washington is, 



LETTER FEOM THE SECRETARY OE THE TREASURY. 19 

on the whole, the most convenient place, since it is possible to secure 
a larger attendance of the important business men and financiers of 
the United States in Washington than elsewhere. Moreover, the 
Pan American Union has a beautiful building in Washington with 
ideal facilities, which can doubtless be secured always for such 
meetings. 

It is a great pleasure to acknowledge the courtesies extended by 
the Pan American Union to the Financial Conference of 1915 and to 
testify to the valuable cooperation of the directors and officers of the 
Pan American Union in all that has been done and in all that we are 
undertaking to do. It is the purpose to work in the closest harmony 
and cooperation with the Pan American Union. 

I respectfully suggest that you request the Congress of the United 
States to authorize you to extend an invitation to the Latin- American 
Republics to attend another Financial Conference in Washington in 
1916, and that an appropriation of $50,000 be made for this purpose. 
This is the same amount as the appropriation for the 1915 Conference. 
I earnestly hope that this recommendation will be adopted, because I 
think it will contribute immeasurably to the successful progress of 
the work so auspiciously begun by the Conference of 1915. 

My suggestions for carrying on the work of the Pan American 
Financial Conference and for establishing improved financial and 
commercial relations between Latin America and the United States 
may be summarized as follows: 

First. That the twelve Federal reserve banks establish promptly 
joint agencies in the leading cities of all the countries of Central and 
South America for the purpose of providing enlarged credit facili- 
ties, as outlined in the first part of this report. 

Second. That the Government of the United States provide 
promptly the necessary steamship facilities by subscribing the capital 
stock of a corporation organized for the purpose of owning and 
operating the necessary steamship lines. 

Third. That the International High Commission on Uniformity of 
Laws be granted an appropriation of $25,000 to enable it to carry 
on the important work it has undertaken and represent the United 
States in the meeting of the International High Commission of all 
the Latin American Republics. 

Fourth. That a Pan American Financial Conference be held 
annually in the city of Washington, and that the Congress authorize 
the President to extend invitations to the Republics of Latin America 
to attend a financial conference in the city of Washington during the 
year 1916, and that an appropriation of $50,000 be made for said 
Conference. 



20 PAN AMERICAN FINANCIAL CONFERENCE. 

Meanwhile the group committees and the committee to arrange for 
a visit of our representative business men and bankers to South and 
Central America will carry on the work assigned to them with 
earnestness and enthusiasm. It is most gratifying to note the deep 
and general interest manifested throughout the United States in the 
Pan American Financial Conference and in the subject of Pan 
Americanism. 

Respect fully, 

(Signed) W. G. McAdoo. 

The President, 

The White House, Washington, D. (7. 



REPORT OF THE SECRETARY GEN- 
ERAL OF THE PAN AMERICAN 
FINANCIAL CONFERENCE TO THE 
SECRETARY OF THE TREASURY 



2] 



REPORT OF DR. L. S. ROWE, SECRETARY GENERAL OF THE PAN 
AMERICAN FINANCIAL CONFERENCE, TO THE HONORABLE 
W. G. McADOO, SECRETARY OF THE TREASURY. 



Sir : I have the honor to submit to you a report on the organiza- 
tion and procedure of the Pan American Financial Conference which 
convened in the city of Washington on Monday, May 21, and con- 
tinued in session until Saturday, May 29. 

At the request of the Secretary of the Treasury the original invi- 
tation to the Conference was extended to the respective Governments 
of Central and South America in a cable instruction issued by the 
Department of State to the diplomatic representatives of the United 
States in the countries of Central and South America, with the ex- 
ception of Haiti and Mexico. These instructions read as follows: 

Department of State, 
Washington, March 12, 1915. 
American Embassy (or Legation) : 

In pursuance of a provision in the Diplomatic and Consular appropriation 
act approved March 4, 1915, you are instructed to extend, in the name of the 
President, an invitation to the Government to which you are accredited to 
appoint delegates, not exceeding three in number, to attend a conference of the 
Secretary of the Treasury in Washington on May 10, 1915. 

The Conference will be held with a view to establishing closer and more 
satisfactory financial relations between the Republics of America, and it is 
hoped that the Minister of Finance of the respective Governments will be able 
to attend as one of the three delegates and that the delegates may be versed in 
finance and in banking and business problems. 

The delegates who may be appointed hereunder, while they are in this coun- 
try, will be the guests of the United States of America. The Secretary of State 
of the United States of America will participate in the Conference, and the 
diplomatic representatives to the United States of America of the respective 
countries to whom this invitation is sent will be themselves invited to attend 
the Conference, in addition to the members whose special appointment is here 
invited. 

It is the intention of the Secretary of the Treasury to invite to the Conference, 
in addition to the above, leading and representative bankers of the United 
States of America. It is expected that the Conference will discuss, in addition 
to the problems of banking, problems of transportation and commerce between 
the various countries represented. 

The President especially desires you in communicating the invitation to im- 
press upon the Government to which you are accredited the great pleasure it 

23 



24 PAST AMEEICAN FINANCIAL CONFERENCE. 

will give him and his associates in the Government to welcome its delegates to 
the Conference and to extend to them the hospitality of the Government of the 
United States of America. 

(Signed) Bryan. 

A later telegram, dated March 31, was sent to the same legations, 
instructing them to inform the Governments to which they were 
accredited that owing to the illness of the Secretary of the Treasury 
the meeting of the Conference had been postponed until May 24. 

The invitation thus issued met with an immediate and hearty 
response. All the countries of Central and South America were 
suffering severely from the' effects of the European war and were 
looking to the United States as the only possible source of relief from 
the financial difficulties with which they were confronted. The invi- 
tation to the Conference was interpreted as an indication of the desire 
of the Government and people of the United States not only to enter 
into closer financial and commercial relations with the Republics of 
Central and South America, but also as an expression of the desire to 
cultivate a spirit of cooperation and mutual helpfulness. 

Soon after the issuance of the invitation the Governments of the 
countries of Central and South America began to make appoint- 
ments of delegates, and some weeks before the convening of the Con- 
ference notice of such appointments had been received. The list of 
delegates thus appointed is as follows : 

Argentina:* Cuba: 

Senor Dr. Samuel Hale Pearson. Senor Dr. Pablo Desvernine y 

Senor Dr. Ricardo C. Aldao. Galdos. 

Senor Dr. V. Villamil. Seiior Dr. Porfirio Franca y Al- 

varez de la Campa. 
Bolivia : Senor Dr. Octavio Zayas y Adan. 

Senor Dr. Ignacio Calder6n. 

Senor Dr. Adolfo Balliviam Dominican Republic : 

Senor Dr. Francisco J. Peynado. 
Brazil : Seiior Dr. Enrique Jimenez. 

Senhor Dr. Amaro Cavalcanti. 

Chile ■ Ecuador : 

Senor Dr. Luis Izquierdo. | e 5 0r £ r - £? a * Cu ^ va Garc ^ 

Senor Dr. Augusto Villanueva. Senor Dr. Vicente Gonzales B. 

Senor Dr. Gonzalo Vergara Bulnes. Senor Dr - Enrique Gallardo. 

Colombia : Guatemala : 

Seiior Dr. Santiago Perez Triana. Seiior Dr. Victor Sanchez Ooafia. 

Seiior Dr. Roberto Ancizar. Seiior Dr. Carlos Herrera. 

Senor Dr. Juan S. Lara. 
Costa Rica : 

Seiior Dr. Mariano Guardia Honduras : 

Carazo. Seiior Dr. Leopoldo Cordova. 

Seiior Dr. John M. Keith. Seiior Dr. Daniel Fort in. 

* Dr. Villamil and Mr. John E. Zimmermann attended the conference as representa- 
tives of the Buenos Aires Chamber of Commerce. 



REPOBT OF THE SECRETARY GENERAL. 



25 



Nicaragua : 

Senor Dr. Pedro Rafael Cuadra. 
Senor Dr. Albert Strauss. 
Senor Dr. Clifford D. Ham. 

Panama : 

Seiior Dr. Aristides Arjona. 
Senor Dr. Ramon F. Acevedo. 
Senor Dr. Ram6n Arias, jr. 

Paraguay : 

Senor Dr. Hector Velazquez. 
Senor Dr. William Wallace 
White. 



Peru : 

Senor Dr. Isaac Alzamora. 
Senor Dr. Eduardo Higginson. 

Salvador : 

Senor Dr. Alfonso Quinonez M. 
Senor Dr. Jose E. Suay. 
Senor Dr. Roberto Aguilar. 

Uruguay : 

Senor Dr. Pedro Cosio. 
Senor Dr. Gabriel Terra. 
Senor Dr. Carlos Maria de Pena. 

Venezuela : 

Senor Dr. Pedro Rafael Rincones. 



The delegates began to arrive in this country early in May and were 
greeted in New York by a special committee appointed by the Secre- 
tary of the Treasury. The membership of this committee was as 
follows : 

Dudley Field Malone, Chairman. 

Martin Vogel, Vice Chairman. 



Pierre Jay. 
A. H. Wiggin. 
Henry P. Davison. 
Frank A. Vanderlip. 
Benjamin Strong, jr. 
Jacob H. Schiff. 
Dr. H. E. Bard. 



E. H. Outerbridge. 
William A. Marble. 
James S. Alexander. 
William Woodward. 
Sereno S. Pratt. 
William F. Morgan. 
S. R. Bertron. 



Cabot Ward. 
Willard D. Straight. 
A. Barton Hepburn. 
James A. Farrell. 
William C. Van Antwerp. 
Franklin Q. Brown. 



As soon as possible after their arrival in New York a preliminary 
announcement was sent to delegates containing a list of questions sub- 
mitted for the consideration of the Conference by the Secretary of 
the Treasury. 

Questions Suggested by the Secretary of the Treasury for the Considera- 
tion of the Group Committees. 

I. Public finance. 

Public Revenues and Expenditures as Affected by Recent Events in Europe. 

Measures Adopted to Meet the Situation. 

Proposed Remedies. 

Possibilities of International Cooperation. 

II. The monetary situation. 

Conditions Prior to the Outbreak of the European War. 

Effects of the War. 

Possibilities of International Cooperation. 

Outlook for Uniform Monetary Standards. 



III. The present hanking situation. 

Conditions Existing Prior and Subsequent to the Outbreak of the European 

War. 
The Establishment of Branch Banks and of Direct Exchange. 
Possibilities of Further International Cooperation. 



26 PAN AMERICAN FINANCIAL CONFERENCE. 

IV. The financing of public improvements. 

(a) The Underwriting of National Loans. 
(6) The Underwriting of Provincial or State Loans. 
(c) The Underwriting of Municipal Loans. 

id) The Relation of Public Credit to a Well Organized System of Taxation 
and a Balanced Budget. 

V. The financing cf private enterprises. 

(a) The Present Needs of Public Service Companies, such as Railroad, Street 

Railway, Electric Light, Gas, and Power Companies. 
(6) The Needs of Merchants and Manufacturers. 

(c) The Financing of Seasonable Crops. 

(d) The Consideration of Plans to Secure a more satisfactory status for Col- 

lateral as Security for Commodity Loans. 

(e) The Possibility of Securing Greater Uniformity in the Laws relating to 

Trade and Commerce, in Customs Regulations, and the more effective 
Protection of Trade-Marks. 

VI. The extension of inter-American markets. 

(a) Long Term Credits as Means of Stimulating Inter-American Trade. 
(6) Acceptances and Discounts (including warehouse receipts) as a Means of 
Extending Inter-American Trade. 

(c) The Establishment of Direct Exchange (often referred to as "dollar ex- 

change " ) as a Means of Extending American Trade. 

(d) The Adaptation of the Manufactured Products of the United States to the 

Needs of the Nations of Central and South America. 

(e) Tariff Laws as affecting Trade with the United States. 

VII. Merchant marine and improved transportation facilities. 

(a) Increased and Improved Ocean Transportation Facilities. 

1. The present needs in this respect. 

2. Statement of shipping facilities now enjoyed. 

3. Suggestions as to the best means of securing improved transporta- 

tion service. 

4. What public or private encouragement for improved transportation 

facilities can be expected from the countries represented at the 
Conference. 
(&) Improved Postal Facilities (including Money Orders) and Parcel Post. 

The delegates did not begin to arrive in Washington until the 19th 
and 20th of May and were entertained at the Hotel Shoreham as 
special guests of the Nation. In accordance with your directions every 
effort was made to provide for their comfort and convenience while 
in this country, and the general expressions of satisfaction on the 
part of the delegates indicated that these efforts were entirely suc- 
cessful. 

On the morning of Saturday, May 22, the delegations met for an 
informal preliminary conference with the Secretary of the Treasury ; 
the object of this conference being to present to them the main pur- 
poses for which the Conference had been called, and to facilitate a 



REPORT OP THE SECRETARY GENERAL. 27 

frank and free interchange of opinion. In opening this conference, 
Secretary McAdoo said : 

Gentlemen and Fellow Americans : Let me welcome you to Washington 
and assure you of my deep gratitude to you for responding so promptly and 
graciously to my invitation, especially upon such short notice. It occurred to 
us who are trying to get the machinery of this Conference in motion that if we 
might meet this morning in advance of the regular sessions and exchange ideas 
iji regard to the features of the convention it would be advantageous. What we 
hope to accomplish by this Conference is to have a free and frank interchange 
of views, to have you tell us as much as you are willing to tell us about your 
problems and about your situation in South America, and tell us how we can 
cooperate with you in solving any of your problems ; and we want at the same 
time to get the benefit of what you tell us here in trying to solve our own 
problems. 

We feel that the time has come when there ought to be greater cooperation 
in a material way between the nations of North and South America. I do not 
think that is an objectionable kind of materialism. The right kind of mate- 
rialism is a powerful aid to national prosperity. Without that as the sub- 
stantial basis for national and individual life it is very difficult to cultivate 
high ideals and to maintain great moral power or to exert potential moral 
influence. 

So, in asking you to come to Washington under such favorable auspices as 
you do come and to take up with us in a spirit of helpfulness and cooperation 
these serious problems which have grown out of this great world struggle we 
hope that we may be of mutual benefit to one another. 

In working out the method of conducting this Conference I thought it would 
be an advantage if we divided the delegations into the natural divisions which 
each country suggests, and that the delegates from the United States, who 
in numbers, but not in abilities, outnumber you, should be divided into 18 
committees, one being assigned to each of the visiting countries, so that you 
might have a series of group conferences, where you could with the utmost 
freedom and candor discuss any problems peculiarly or distinctively your own. 
I imagine — in fact, I know — that there are many problems of your respective 
countries which relate to public finance or internal development or internal 
economy, and that nothing would be gained by a debate of such matters in a 
general session of the Conference. Therefore I have felt that it would be 
wiser if these group conferences were arranged. 

It is our purpose to appoint the ranking member of each visiting delega- 
tion chairman of each group conference, so that the initiative in a way will 
be with you ; that is, the initiative of bringing before the group meetings such 
subjects as you may wish to present. I would therefore suggest that after the 
group conferences are organized, as I have outlined, the chairmen of the 
delegations present promptly such subjects and such matters as they may 
care to draw to the attention of the group meetings. That will bring on 
discussion, which can be elaborated to such extent as may be wise. 

You will find that the delegates from the United States will be most anxious 
to cooperate with you and to facilitate your deliberations, and also to be as 
useful as possible in the discussion of these problems. 

As a preliminary to the General Conference, it also occurred to me that you 
may have some memoranda that you may care to submit for the consideration 
of the General Conference. There are, of course, a large number of questions 
that have a common interest to all of the nations. Such questions will natu- 



28 PAN AMEEICAN FINANCIAL CONFERENCE. 

rally be discussed in the general sessions of the Conference. If you have 
already prepared such memoranda or suggestions on subjects which you would 
like to have brought before the Conference, and if you care to submit them 
now, we will print them in English and Spanish, so that when the time comes 
to discuss them advance information will be at hand. It is not necessary that 
you have such memoranda. I only suggest this for your convenience and for 
the information of all the delegates who may attend. If you have not such 
memoranda prepared, and care to prepare and submit them by Monday, we shall 
see that they are put in type and distributed as quickly as possible thereafter. 

I may say that when the regular Conference assembles Monday next we 
shall be very happy, indeed, if delegates who have their families with them 
will bring them to the meeting. The President will address the Conference, 
and you gentlemen will also deliver addresses, so that it will be an agreeable 
and pleasant occasion for the ladies to witness. 

This meeting is merely for an informal interchange of ideas. We are most 
anxious to have you tell us anything you think will contribute to the value 
of the discussions and the successful conduct of this Conference, and if you 
will now be good enough to respond to the roll call we shall be very happy, 
indeed, to have you say anything you wish to say. 

(After the roll call of the various countries, Secretary McAdoo said:) 

We are very grateful to you for these statements and for the expression of 
these kindly and generous sentiments, and before we adjourn I wish to say that 
I do earnestly hope, and I am speaking with the utmost sincerity, that you and 
each of you will not fail to let us know of anything on earth that we can do for 
you here, that you will command us if the arrangements are not satisfactory, 
or if there is anything in addition that we can do to contribute to your happi- 
ness. We have such an organization that it will not be in the least difficult to 
communicate at any time your wants and desires. We have a military and 
naval aid assigned to each delegation. They will translate your wants into 
realities. 

The Secretary added : 

It has occurred to me that possibly you might care to visit the Bureau of En- 
graving and Printing this afternoon, which is one of the handsome new build- 
ings of the city. Here the Government prints all of its paper money, stamps, 
and securities. I think we do some work at times for our sister Republics. We 
shall have automobiles meet you at the hotel at 1.30 p. m. 

The formal opening of the conference took place on Monday morn- 
ing, May 24. At this session the President of the United States de- 
livered an address (see p. 87), and a formal welcome on behalf of 
the Government of the United States was extended to the delegates 
by the Secretary of State (see p. 89). Responses immediately fol- 
lowed by the chairman of each delegation. Shortly after 12 o'clock 
the members of the conference were received by the President of the 
United States at the White House. 

At the opening of the session of Monday afternoon, May 24, the 
Secretary of the Treasury delivered an address outlining the pur- 
poses of the conference and pointing out the results that could be 
accomplished through the interchange of opinion at such an inter- 
national gathering (see p. 113). The address of the Secretary of the 



REPORT OF THE SECRETARY GENERAL. 29 

Treasury was followed by addresses by the Postmaster General, the 
Hon. Albert S. Burleson (see p. 119), and by the Secretary of Com- 
merce, the Hon. William C. Redfield (see p. 122). At the close of this 
afternoon's session informal addresses were delivered by several 
members of the conference, and the Secretary of the Treasury then 
announced the membership of the group committees. 

The session of Tuesday morning, May 25, was devoted to ad- 
dresses delivered by the Hon. Charles S. Hamlin, Governor of the 
Federal Reserve Board (see p. 152) , and by the Hon. Paul M. War- 
burg, member of the Federal Reserve Board (see p. 165). 

On Tuesday afternoon the group committees met for the first 
time in the special meeting rooms reserved for them at the Hotel 
Shoreham. These meetings continued through Tuesday afternoon 
and all day Wednesday. 

In accordance with the plan formulated by the Secretary of the 
Treasury the representatives from the United States were divided 
into 18 groups, each group assigned to one of the countries repre- 
sented at the conference. Each group conference committee was 
thus composed of the members of an official foreign delegation 
together with a group of financiers and business men from the 
United States. The sessions of these group committees were held 
behind closed doors, thus affording the opportunity for the freest 
interchange of opinion. The financial and commercial needs of the 
countries of Central and South America were presented at these ses- 
sions, and the representatives of the United States submitted their 
views as to the best way in which such needs may be met. It is no 
exaggeration to say that out of these group conferences the founda- 
tion was laid for permanent and helpful cooperation between the 
financiers and merchants of North America and Central and South 
America. 

On Thursday morning, May 27, the fourth general session was 
held, at which addresses were delivered by the Hon. Joseph E. Davies, 
Chairman of the Federal Trade Commission (see p. 195), and the 
Hon. John Barrett, Director General of the Pan American Union (see 
p. 200). These addresses were followed by some general discussion 
and by the consideration of a number of matters that had been sub- 
mitted to the conference during the days immediately preceding. 

Friday morning, May 28, was devoted to group conferences. Many 
of the group committees completed their reports, and at the sixth 
general session, held Friday afternoon, May 28, announced them- 
selves prepared to submit such reports to the conference. The gen- 
eral sessions of Friday afternoon, Saturday morning, and Saturday 
afternoon were devoted to a presentation and consideration of the 
reports of the two general committees and of the group committee 



30 PAN AMEBICAN FINANCIAL CONFEEENCE. 

reports (see pages 297 and 311ff). A summary of the latter was pre- 
sented to the conference by the Hon. John Bassett Moore (see pages 
250f, 265, 275, 277). 

It became apparent early in the proceedings of the Conference that 
the subject that was uppermost in the minds of all delegates was the 
improvement of transportation and means of communication, espe- 
cially of shipping facilities between the United States and the coun- 
tries of Central and South America. At the suggestion of several 
delegations, a " General Committee on Transportation and Means of 
Communication " was appointed by the chairman of the Conference. 
This committee was composed as follows : 

General Committee on Transportation and Communication. 

Argentine Delegation : 

Senor Dr. Samuel Hale Pearson. 

Senor Dr. Ricardo C. Aldao. 

Senor Dr. V. Villamil. 

Senor Dr. John E. Zimmerman. 
Brazilian Delegation : 

Senhor Dr. Amaro Cavalcanti. 
Chilean Delegation : 

Senor Dr. Luis Izquierdo. 

Senor Dr. Augusto Villanueva. 

Senor Dr. Gonzalo Vergara Bulnes. 

ECUADOREAN DELEGATION " 

Senor Dr. Vicente Gonzales B. 
Peruvian Delegation : 

Senor Dr. Isaac Alzamora. 

Senor Dr. Eduardo Higginson. 
Uruguayan Delegation : 

Senor Dr. Pedro Cosio. 

Senor Dr. Gabriel Terra. 

Senor Dr. Carlos Maria de Pena. 
Representatives of the United States : 

The Hon. D. R. Francis. 

The Hon. Edward M. Hurley. 

Mr. Franklin Q. Brown. 

Mr. Paul Fuller. 

Mr. George W. Norris. 

Mr. R. Goodwin Rhett. 

Mr. Sol Wexler. 

Mr. Harry A. Wheeler. 

Mr. J. G. White. 

This committee held several sessions and its report will be found 
in the proceedings, page 305. 

Another general committee appointed by the chairman of the Con- 
ference was intrusted with the consideration of " Uniformity in the 
Laws Kelating to Trade and Commerce and the Establishment of an 



REPORT OF THE SECRETARY GENERAL. 31 

International Commercial Court." This committee was constituted 
as follows : 

Chairman, Honorable William C. Redfield. 

Senor Dr. Samuel Hale Pearson, Argentina. 

Senor Dr. Ignacio Calderon, Bolivia. 

Senhor Dr. Amaro Cavalcanti, Brazil. 

Senor Dr. Luis Izquierdo. Chile. 

Senor Dr. Santiago Perez Triana, Colombia. 

Seiior Dr. Roberto Ancizar, Colombia. 

Senor Dr. John M. Keith, Costa Rica. 

Seiior Dr. Pablo Desvernine y Galdos, Cuba. 

Seiior Dr. Francisco J. Peynado, Dominican Republic. 

Senor Dr. Vicente Gonzales B., Ecuador. 

Senor Dr. Juan S. Lara, Guatemala. 

Senor Dr. Leopoldo Cordova, Honduras. 

Senor Dr. Pedro Rafael Cuadra, Nicaragua. 

Seiior Dr. Ramon F. Acevedo, Panama. 

Senor Dr. William Wallace White, Paraguay. 

Senor Dr. Isaac Alzamora, Peru. 

Seiior Dr. Alfonso Quinonez M., Salvador. 

Senor Dr. Carlos Maria de Pena, Uruguay. 

Senor Dr. Pedro Rafael Rincones, Venezuela. 
Members representing the United States : 

The Honorable Charles S. Hamlin. 

The Honorable John Barrett. 

The Honorable Charles A. Conant. 

The Honorable David R. Francis. 

The Honorable John Hays Hammond. 

The Honorable John Bassett Moore. 

The Honorable Robert W. Woolley. 

Mr. George H. Nunisen. 

Mr. W. L. Saunders. 

Mr. Benjamin Strong, jr. 

Mr. Willard Straight. 

Mr. Samuel Untermyer. 

This committee held several sessions, and in the final report recom- 
mended the establishment of an International High Commission, 
composed of nine members resident in each country represented at 
the Conference appointed by the respective ministers of finance. 
(For report see p. 299.) 

The final sessions of the Conference were held on Saturday morn- 
ing and Saturday afternoon, May 29, at which further considera- 
tion was given to the reports of the general committees and the group 
committees. 

On Saturday evening, May 29, the Secretary of the Treasury 
tendered a banquet to the members of the Conference, at which a 
series of addresses were delivered. (See p. 469.) 

Adequate accommodations for so important a Conference were 
made possible by the generosity of the members of the Governing 



32 PAN AMERICAN FINANCIAL CONFERENCE. 

Board of the Pan American Union, who placed their magnificent 
building at the disposal of the Conference. That we were able to 
meet every requirement for the general sessions as well as for the 
general committee meetings is due to the efficient executive organiza- 
tion of the Director General of the Pan American Union, the Hon. 
John Barrett, and I desire to take this opportunity to record a deep 
sense of obligation to the governing board of the Pan American 
Union, as well as to the Director General, for their cordial co- 
operation. 

This report would be incomplete were I not to avail myself of the 
opportunity to express to you, Mr. Secretary, my most sincere 
appreciation of the cordial and earnest support which you gave to the 
secretary general's office during the period immediately preceding the 
Conference as well as during the sessions. I also desire to express 
a deep sense of obligation to the Hon. Andrew J. Peters, Assistant 
Secretary of the Treasury, for most helpful assistance, as well as to 
the assistant secretaries general, Messrs. Gittings, Parker, Miles, 
and Sands. 

Immediately upon the adjournment of the Conference the problem 
which confronted the Secretary of the Treasury was to make the 
work of the Conference effective and to give to it a permanent organ- 
ization. With this end in view, four important steps are to be taken : 
First, the appointment by the Finance Minister or Secretary of the 
Treasury of each of the countries represented at the Conference of 
an International High Commission composed of nine members from 
each country. The mission of these commissions is to bring about 
greater uniformity in legislation relating to trade and commerce, and 
in business methods and procedure, arid also to promote the establish- 
ment of an international commercial court. Secondly, the appoint- 
ment of permanent group committees in the United States, each com- 
mittee assigned to one of the countries represented at the Conference. 
These committees are to serve as centers of information to which 
financiers and merchants both in the United States and in the coun- 
tries to which such committees are assigned may refer for informa- 
tion and guidance. Third, the appointment of a committee to ar- 
range for a visit of American financiers and business men to Central 
and South America. This committee is appointed in response to 
an invitation extended by the foreign delegations of the countries 
represented at the Conference. Fourth, the taking of such steps as 
may tend toward the solution of the problem of efficient transporta- 
tion and communication between the Americas. 

This Financial Conference marks an epoch in the relations betweeen 
the United States and the countries of Central and South America. 
In one sense, the questions discussed were of a material character, 



REPORT OF THE SECRETARY GENERAL. 33 

but it is through the spirit of cooperation developed in the solution 
of these material problems that the foundations are laid for that 
closer relationship and spirit of unity which mean so much to the 
nations of the American Continent and without which they can not 
hope to fulfill the world mission which they are called upon to 
perform. 

I beg, sir, to remain, your obedient servant, 



To the Honorable 

William Gibbs McAdoo, 

Secretary of the Treasury. 
98257°— 15 3 



' L. S. Rowe, 

Secretary General. 



PROGRAM OF THE CONFERENCE 
AND LIST OF QUESTIONS SUB- 
MITTED. BY THE SECRETARY OF 
THE TREASURY FOR CONSIDERA- 
TION OF THE CONFERENCE 



35 



PROGRAM OF THE PAN-AMERICAN FINANCIAL 
CONFERENCE 



37 



PRESIDING OFFICER 

The Secretary of the Treasury 
The Honorable WILLIAM G. McADOO 



HONORARY PRESIDENTS. 

Their Excellencies the Ministers of Finance — 

Senor Dr. Enrique Carbo Argentina. 

Senor Dr. Casto Eojas Bolivia. 

Senhor Dr. Sabino Barroso Brazil. 

Sefior Dr. Alberto Edwards Chile. 

Senor Dr. Jorge Velez Colombia. 

Senor Dr. Mariano Guardia Carazo Costa Rica. 

Senor Dr. Leopoldo Cancio E Cuba. 

Senor Dr. Salvador B. Gautier Dominican Republic. 

Senor Dr. Agustin Cabezas Ecuador. 

Senor Dr. Guillermo Aguirre Guatemala. 

Senor General Leopoldo Cordova __ Honduras. 

Seiior Dr. Eulogio Cuadra _ _ _ Nicaragua. 

Senor Dr. Aristddes Arjona Panama. 

Senor Dr. Jeronimo Zubizarreta Paraguay. 

Senor Dr. Lino Felyse Villaran Peru. 

Senor Dr. Samuel Luna Salvador. 

Senor Dr. Pedro Cosio Uruguay. 

Senor Dr. Roman Cardenas Venezuela. 

39 



VICE PRESIDENTS. 

The Honorable Andrew J. Peters, Assistant Secretary of the 
Treasury. 

Sefior Dr. Samuel Hale Pearson, Chairman of Argentina Delegation. 

Sefior Dr. Ignacio Calderon, Chairman of Bolivia Delegation. 

Senhor Dr. Amaro Cavalcanti, Chairman of Brazil Delegation. 

Sefior Dr. Luis Izquierdo, Chairman of Chile Delegation. 

Sefior Dr. Santiago Perez Triana, Chairman of Colombia Delega- 
tion. 

Sefior Dr. Mariano Guardia Carazo, Chairman of Costa Eica Dele- 
gation. 

Sefior Dr. Pablo Desvernine y Galdos, Chairman of Cuba Delega- 
tion. 

Sefior Dr. Francisco J. Peynado, Chairman of Dominican Republic 
Delegation. 

Sefior Dr. Juan Cueva Garcia, Chairman of Ecuador Delegation. 

Sefior Dr. Victor Sanchez Ocana, Chairman of Guatemala Delega- 
tion. 

Sefior Dr. Leopoldo Cordova, Chairman of Honduras Delegation. 

Sefior Dr. Pedro Rafael Cuadra, Chairman of Nicaragua Delegation. 

Sefior Dr. Aristides Arjona, Chairman of Panama Delegation. 

Sefior Dr. Hector Velazquez, Chairman of Paraguay Delegation. 

Sefior Dr. Isaac Alzamora, Chairman of Peru Delegation. 

Sefior Dr. Alfonso Quinonez M., Chairman of Salvador Delegation. 

Sefior Dr. Pedro Cosio, Chairman of Uruguay Delegation. 

Sefior Dr. Pedro Rafael Rincones, Chairman of Venezuela Dele- 
gation. 

40 



OFFICIAL DELEGATIONS. 

Argentina :* 

Senor Dr. Samuel Hale Pearson. 
Senor Dr. Ricardo C. Aldao. 
Senor Dr. V. Villamil. 

Bolivia : 

Senor Dr. Ignacio Calder6n. 
Senor Dr. Adolfo Ballivian. 

Brazil : 

Senhor Dr. Ainaro Cavalcanti. 

Chile : 

Senor Dr. Luis Izquierdo. 
Senor Dr. Augusto Villanueva. 
Senor Dr. Gonzalo Vergara Bulnes. 

Colombia: 

Senor Dr. Santiago Perez Triana. 
Senor Dr. Roberto Ancizar. 

Costa Rica: 

Senor Dr. Mariano Guardia Carazo. 
Senor Dr. John M. Keith. 

Cuba: 

Senor Dr. Pablo Desvernine y Galdos. 

Senor Dr. Porfirio Franca y Alvarez de la Camp a. 

Senor Dr. Octavio Zayas y Adan. 

Dominican Republic: 

Senor Dr. Francisco J. Peynado. 
Senor Dr. Enrique Jimenez. 

Ecuador : 

Senor Dr. Juan Cueva Garcia. 
Senor Dr. Vicente Gonzales B. 
Senor Dr. Enrique Gallardo. 

Guatemala : 

Sefior Dr. Victor Sanchez Ocana. 
Senor Dr. Carlos Herrera. 
Senor Dr. Juan S. Lara. 

* Dr. Villamil and Mr. John E. Zimmerniann attended the conference as representa- 
tives of the Buenos Aires Chamber of Commerce. 

41 



42 PAN AMERICAN FINANCIAL CONFERENCE. 

Honduras : 

Senor Dr. Leopoldo Cordova. 
Senor Dr. Daniel For tin. 

Nicaragua : 

Senor Dr. Pedro Rafael Cuadra. 
Senor Dr. Albert Strauss. 
Senor Dr. Clifford D. Ham. 

Panama : 

Senor Dr. Aristides Arjona. 
Senor Dr. Ramon F. Acevedo. 
Senor Dr. Ramon Arias , Jr. 

Paraguay : 

Senor Dr. Hector Velazquez. 
Senor Dr. William Wallace White. 

Peru: 

Senor Dr. Isaac Alzamora. 
Senor Dr. Eduardo Higginson. 

Salvador : 

Senor Dr. Alfonso Quinonez. 
Senor Dr. Jose E. Suay. 
Senor Dr. Roberto Aguilar. 

Uruguay : 

Senor Dr. Pedro Cosio. 

Senor Dr. Gabriel Terra. 

Senor Dr. Carlos Maria de Pena. 

Venezuela : 

Senor Dr. Pedro Rafael Rincones 



MEMBERS OF THE DIPLOMATIC CORPS INVITED TO ATTEND 
THE CONFERENCE. 

His Excellency the Ambassador of Argentina. 

His Excellency the Ambassador of Brazil. 

His Excellency the Ambassador of Chile. 

The Minister of Bolivia. 

The Minister of Colombia. 

The Minister of Costa Rica. 

The Minister of Cuba. 

The Minister of the Dominican Republic. 

The Minister of Ecuador. 

The Minister of Guatemala. 

The Minister of Honduras. 

The Minister of Nicaragua. 

The Minister of Panama. 

The Minister of Paraguay. 

The Minister of Peru. 

The Minister of Salvador. 

The Minister of Uruguay. 

The Minister of Venezuela. 

43 



REPRESENTATIVES OF THE UNITED STATES IN ATTEND- 
ANCE AT THE CONFERENCE. 

Aerts, G. A., Chamber of Commerce, Cincinnati. (Costa Rica.) 

Allen, Frederic W., Lee Higginson & Co., Boston [vice J. J. Storrow]. 
(Peru.) 

Ardrey, J. Howard, Cashier City National Bank, Dallas. (Salvador.) 

Arnold, J. J., Banker, Chicago. (Peru.) 

Austin, Richard L., Chairman Federal Reserve Bank, 408 Chestnut 
Street, Philadelphia. (Nicaragua.) 

Babson, Roger W., Statistician, Boston. (Peru.) 

Bancroft, Chas. G., President International Trust Co., Boston. 

Barrett, Hon. John, Director-General Pan-American Union, Wash- 
ington. 

Bippus, W. F., Treasurer National Cash Register Co., Dayton. 
(Bolivia.) 

Bixby, William K., American Car & Foundry Co., St. Louis. (Uru- 
guay.) 

Boyd, L. C, Banker, Indianapolis. (Paraguay.) 

Brand, Charles J., Chief, Office of Markets and Rural Organization, 
Department of Agriculture, Washington. (Costa Rica.) 

Brown, F. Q., Redmond & Co., New York. (Cuba.) 

Brown, James, New York. (Nicaragua.) 

Bryan, Hon. Wm. Jennings, Secretary of State, Calumet Place, NW., 
Washington. 

Burke, John, Treasurer of the United States, Washington. (Salva- 
dor.) 

Burleson, Hon. Albert Sidney, Postmaster General, 1901 F Street, 
NW., Washington. 

Butterworth, William, President Deere & Co., Moline, 111. (Uru- 
guay.) 

Clausen, John, Manager Foreign Department, Crocker National 
Bank, San Francisco. (Ecuador.) 

Clapham, A. G., President Commercial National Bank, Washington. 
(Panama.) 

Conant, Charles A., 32 Liberty Street, New York. (Cuba.) 

Conklin, Franklin, Newark. (Ecuador.) 

Cone, Caesar, Cotton Manufacturer, Greensboro. (Brazil.) 

Coolidge, J. Randolph, Architect, Boston. (Panama.) 

44 



PROGRAM AND LIST OF QUESTIONS. 45 

Cornell, Charles L., Treasurer Niles-Bement-Pond Co., Ill Broad- 
way, New York. (Venezuela.) 

Crane, Charles R., Manufacturer, Chicago. (Panama.) 

Curtiss, Frederic R., Chairman Federal Reserve Bank, 53 State 
Street, Boston. (Salvador.) 

Davies, Hon. Joseph E., Chairman Federal Trade Commission, 2117 
Le Roy Place, NW., Washington. (Colombia.) 

Deans, H. G. P., Manager Foreign Department, Merchants' Loan & 
Trust Co., Chicago. (Salvador.) 

Delano, Frederick A., Vice-Go vernor Federal Reserve Board, 1128 
Sixteenth Street, Washington. (Argentina.) 

De Lanoy, William C, Director Bureau of War Risk Insurance, 
Treasury Department, Washington. (Honduras.) 

de Lima, E. A., Banker, 58 West Eighth Street, New York. (Costa 
Rica.) 

de Navarro, Alfonso, Vice President Atlas Portland Cement Co., 
New York. (Paraguay.) 

Douglas, William H., Merchant, New York. (Peru.) 

Downey, Hon. George E., Comptroller of the Treasury, Washington. 

Duval, G. L., 25 Broad Street, New York. (Peru.) 

Eaton, Frederick H., President American Power & Foundry Co., 
New York. (Chile.) 

Edson, John Joy, President Washington Loan & Trust Co., 
Washington. (Venezuela.) 

Eldridge, H. R., Vice President National City Bank, New York. 
(Uruguay.) 

Elliott, Hon. Milton C, Counsel Federal Reserve Board, Washing- 
ton. (Boh via.) 

Emerson, Guy, 80 Wall Street, New York. (Dominican Republic.) 

Erskine, A. R., The Studebaker Corporation of South Bend, Ind. 
(Paraguay.) 

Esberg, A. I., 1020 Second Avenue, New York. (Cuba.) 

Fahey, John H., President of the United States Chamber of Com- 
merce, Tremont Building, Boston. (Paraguay.) 

Fairchild, Samuel W., Fairchild Bros. & Foster, New York. (Peru.) 

Falconer, Charles E., President Merchant and Manufacturers Asso- 
ciation, Baltimore. (Dominican Republic.) 

Fancher, E. R., Governor Federal Reserve Bank, Williamson Build- 
ing, Cleveland. (Dominican Republic.) 

Farquhar, A. B., A. B. Farquhar & Co., New York. (Cuba.) 

Farrell, James A., President U. S. Steel Corporation, New York. 

Fisher, Edmund D., Banker, City Deputy Controller, New York. 
(Honduras.) 

Flint, Charles R., 25 Broad Street, New York. (Chile.) 

Flood, Hon. Henry D., Member of Congress, Virginia. (Argentina.) 

Forgan, J. B., President First National Bank, Chicago. (Brazil.) 



46 PAN AMERICAN FINANCIAL CONFERENCE. 

Francis, Hon. David R., Ex-Governor of Missouri. St. Louis. 
(Guatemala. ) 

Fredrick, Leopold, 165 Broadway, New York. (Chile.) 

Fuerth, Otto H., 60 Wall Street, New York. (Bolivia.) 

Fuller, Paul, New York. (Cuba.) 

Galliher, W. T., President American National Bank, Washington. 
(Honduras.) 

Gary, Elbert H., Chairman Board, U. S. Steel Corporation, New 
York. (Argentina.) 

Given, T. H., President Farmers' Deposit & National Bank, 
Pittsburg. (Ecuador.) 

Goldstein, L. S., New Orleans. (Honduras.) 

Goodhue, F. A., Vice President* First National Bank, Boston. 
(Boh via.) 

Goodwin, Elliot H., Secretary U. S. Chamber of Commerce, 
Washington. (Salvador.) 

Gorrell, Frank E., Secretary National Canners' Association, Wash- 
ington. (Colombia.) 

Grace, Joseph P., 1 Hanover Square, New York. (Peru.) 

Green, C. A., Foreign Department R. G. Dun & Co., New York, 
(Chile.) 

Grevstad, Hon. N. A., United States E. E. and M. P. to Uruguay and 
Paraguay. (Uruguay) 

Gregory, Hon. Thomas Watt, Attorney General, 1532 Sixteenth 
Street, Washington. 

Hamlin, Hon. Charles S., Governor Federal Reserve Board, 1515 
Massachusetts Avenue, Washington. (Chile.) 

Hammond, Hon. John Hays, Engineer, New York. 

Harding, Hon. W. P. G., Member Federal Reserve Board, 1855 Wyo- 
ming Avenue, Washington. (Peru.) 

Hardy, Caldwell, Banker, Norfolk. (Costa Rica.) 

Harper, Robert N., President District National Bank, Washington. 
(Costa Rica.) 

Harris, A. M., Harris, Forbes & Co., New York. (Honduras.) 

Harris, Hon. William J., Commissioner Federal Trade Commission, 
2024 O Street, NW., Washington. (Venezuela.) 

Hart, Francis R., Old Colony Trust Co., Boston. (Colombia.) 

Hastings, S. M., Illinois Manufacturers' Association, Chicago. (Bo- 
livia.) 

Hepburn, A. B., Chairman of Board, Chase National Bank, New 
York. (Paraguay.) 

Hollander, Prof. J. H., Johns Hopkins University, Baltimore. (Do- 
minican Republic.) 

Holliday, John H., President Union Trust Co., Indianapolis. (Bo- 
livia.) 

Horton, Elias Q., Otis Elevator Co. (Brazil.) 



.PROGRAM AND LIST OF QUESTIONS. 47 

Howard, A. B., Manager South American Department American 
Express Company, 65 Broadway, New York. (Panama.) 

Hurley, Hon. Edward N., Federal Trade Commission, Washington. 
(Bolivia.) 

Imhoff, C. H., Vice President Irving National Bank, New York. 
(Honduras.) 

Ingle, William, Chairman Federal Reserve Bank, 1109 East Main 
Street, Richmond. (Nicaragua.) 

Janray, C. T., Vice President First National Bank, Minneapolis. 

Jay, Pierre, Chairman Federal Reserve Bank, 62 Cedar Street, New 
York. (Guatemala.) 

Johnson, Alba B., President Baldwin Locomotive Works, Philadel- 
phia. (Chile.) 

Johnston, Archibald, First Vice President Bethlehem Steel Cor- 
poration, 111 Broadway, New York. (Chile.) 

Jones, De Witt Clinton, American Dyewood Co., 80 Maiden Lane, 
New York. (Honduras.) 

Jordan, G. G., Banker, Columbus, Ga. (Dominican Republic.) 

Joy, Benjamin, Cashier National Shawmut Bank, Boston. (Argen- 
tina.) 

Keith, Charles S., Keith & Perry, Kansas City. (Uruguay.) 

Kelly, N. B., General Secretary Chamber of Commerce, Philadelphia. 
(Costa Rica.) 

Kent, Fred I., Vice President Bankers Trust Co., New York. (Ecua- 
dor.) 

Kies, W. S., Foreign Trade Department National City Bank, New 
York. (Brazil.) 

Kiler, Charles A., Champaign, 111. (Costa Rica.) 

Kretz, George H., National Park Bank, New York. (Peru.) 

Lage, Frederico, Mechanics & Metals National Bank, New York. 
(Brazil.) 

Le Gendre, William C, New York. (Uruguay.) 

Loeb, William, Jr., American Smelting & Refining Co., New York. 
(Cuba.) 

Lyerly, Charles A., President First National Bank, Chattanooga. 
(Venezuela.) 

McChord, Joseph A., Governor Federal Reserve Bank, Hurt Build- 
ing, Edgewood Avenue and Exchange Place, Atlanta., (Ecuador.) 

McCrosky, Jas. Warren, J. G. White & Co., New York. (Honduras.) 

McQueen, H. C, Banker, Wilmington, N. C. (Salvador.) 

Maddox, Robert F., American National Bank, Atlanta. (Paraguay.) 

Malburn, Hon. Wm. P., Assistant Secretary of the Treasury, Wash- 
ington. (Guatemala.) 

Martin, William McC, Chairman Federal Reserve Bank, 200 North 
Broadway, St. Louis. (Paraguay.) 



48 PAN AMERICAN FINANCIAL CONFERENCE. 

Meeker, Arthur, Armour Grain Company, 208 South La Salle Street. 
Chicago. (Peru.) 

Meredith, E. T., Des Moines, Iowa. (Colombia.) 

Miller, Hon. Adolph C, Member Federal Reserve Board, 1801 F 
Street, Washington. (Cuba.) 

Miller, J. Z., Jr., Chairman Federal Reserve Bank, R. A. Long Build- 
ing, Tenth Street and Grand Avenue, Kansas City. (Panama.) 

Minotto, James, Guaranty Trust Co., New York. (Guatemala.) 

Mitchell, C. D., President Chattanooga Plow Co., Chattanooga. 
(Peru.) 

Moore, Hon. John Bassett, 267 West Seventy-third Street, New York. 
(Brazil.) 

Morgan, J. P., 15 Broad Street, New York. (Brazil.) 

Muchnic, Charles, Foreign Sales Department American Locomotive 
Co., 30 Church Street, New York. (Colombia.) 

Newton, Hon. Byron R., Assistant Secretary of Treasury, 2610 
Garfield Street, Washington. (Costa Rica.) 

Nickerson, J. F., Vice President Chicago Association of Commerce, 
Chicago. (Salvador.) 

Norris, George W., Banker, Philadelphia. (Panama.) 

Norton, Charles D., First National Bank, New York. (Chile.) 

Numsen, Geo. N., President National Canners' Association, Balti- 
more. (Nicaragua.) 

O'Brien, Hon. Edward C, Ritz Hotel, New York. (Uruguay.) 

Olcott, Hon. J. Van Vechten, President Pan-American States Asso- 
ciation, Hotel McAlpin, Greeley Square, New York. (Paraguay.) 

O'Neil, J. F., President Fulton Iron Works, St. Louis. (Bolivia.) 

Osborn, William H., Commissioner of Internal Revenue, The Wyo- 
ming, Washington. 

Osborne, Hon. John E., First. Assistant Secretary of State, The 
Connecticut, Washington. 

Owens, Dr. Clarence J., Managing Director Southern Commercial 
Congress, Southern Building, Washington. (Venezuela.) 

Paine, A. G., Jr., President New York & Pennsylvania Co., New 
York. 

Parker, Walter, General Manager New Orleans Chamber of Commerec. 
(Nicaragua.) 

Parry, Hon. William H., Commissioner Federal Trade Commission, 
Avondale Apartments, 1734 P Street, Washington. (Ecuador.) 

Patchin, Robert H, National Foreign Trade Council, New York. 
(Paraguay.) 

Penfleld, Walter S., Lawyer, Washington. 

Penny, David H. G., Vice President Irving National Bank, New 
York. (Dominican Republic.) 

Pepper, Charles M., Washington, D. C, 



PROGRAM AND LIST OF QUESTIONS. 49 

Perry, Marsden J., President Union Trust Co., Providence. (Gua- 
temala.) 

Peters, Hon. Andrew J., Assistant Secretary of the Treasury, Wash- 
ington. 

Phillips, Hon. William, Third Assistant Secretary of State, 1535 L 
Street, Washington. 

Pierson, Lewis E., President Austin Nichols Co., New York. (Costa 
Rica.) 

Potter, William C, Guaranty Trust Co., New York. (Colombia.) 

Price, Theodore H., 15 Wall Street, New York. (Venezuela.) 

Raskob, John J., Treasurer E. I. du Pont de Nemours Powder Co., 
Wilmington, Del. (Chile.) 

Redfield, Hon. William Cox, Secretary of Commerce, The Highlands, 
Washington. 

Reynolds, Geo. M., Commercial & Continental National Bank, 
Chicago. (Peru.) 

Reynolds, Hon. James B., National Association of Cotton Manufac- 
turers, 602 Wilkins Building, Washington. (Panama.) 

Rhett, R. G., Banker, Charleston, S. C. (Dominican Republic.) 

Rhoads, Charles J., Governor Federal Reserve Bank, 408 Chestnut 
Street, Philadelphia. (Cuba.) 

Rice, E. W., Jr., President General Electric Co., New York. (Brazil.) 

Rich, John H., Minneapolis, Minn. (Costa Rica.) 

Richards, George H., Foreign Department Remington Typewriter 
Co., 327 Broadway, New York. (Bolivia.) 

Rossell, John S., Vice President Security Trust & Safe Deposit Co., 
Wilmington, Del. (Nicaragua.) 

Rovensky, J. E., National Bank of Commerce, New York. (Uru- 
guay.) 

Rowe, W. S., President First National Bank Cincinnati. (Salvador.) 

Rublee, Hon. George, Commissioner Federal Trade Commission, 
1105 Sixteenth Street, Washington. (Uruguay.) 

Ryan, John D., President Amalgamated Copper Co., New York. 
(Chile.) 

Ruperti, J., Amsinck & Co., 6 Hanover Square, New York. (Gua- 
temala.) 

Sachs, Samuel, Goldman, Sachs & Co., 60 Wall Street, New York, 
(Venezuela.) 

Saunders, W. L., Ingersoll, Rand Co., New York. (Dominican 
Republic.) 

Scruff, Mortimer L., Kuhn, Loeb & Co., New York. (Argentina.) 

Schmidt, George P., Schmidt & Gallatin, New York. (Argentina.) 

Schoonmaker, S. L., Chairman Board of American Locomotive Co., 
New York. (Argentina.) 

98257°— 15 4 



50 PAN AMERICAN FINANCIAL CONFERENCE. 

Seligman, Isaac N., J. W. Seligman & Co., 2 William Street, New 
York. 

Shapleigh, A. L., President Commercial Club, St. Louis. (Guatemala.) 

Sherrill, Charles H., 30 Broad Street, New York. (Argentina.) 

Shirley, James J., T. A. Gillespie Co., 50 Church Street, New York. 
(Uruguay.) 

Simmons, W. D., 425 Arch Street, Philadelphia. (Colombia.) 

Smith, Charles E. W., 42 Broadway, New York. (Argentina.) 

Speyer, James, Speyer & Co., New York. (Bolivia.) 

Storrow, James, Lee, Higginson & Co., Boston. (Bolivia.) 

Straight, Willard, J. P. Morgan & Co., New York. (Colombia.) 

Strong, Benjamin, Jr., Governor Federal Reserve Bank, 62 Cedar 
Street, New York. (Honduras.) 

Sulzberger, G. F., Sulzberger & Sons Co., Forty-fifth Street and 
First Avenue, New York. (Argentina.) 

Sutter, Charles S., Chairman Executive Committee of Foreign Trade 
Bureau for the Business Men's League of St. Louis, St. Louis. 
(Brazil.) 

Swiggett, Dr. Glen L., Pan-American Union, Washington. (Guate- 
mala.) 

Tedcastle, A. W., 89 Beach Street, Boston. (Ecuador.) 

Thomas, E. P., President U. S. Steel Products Co., New York. 
(Brazil.) 

Thompson, Hon. Arthur, Member of the Nicaraguan Mixed Claims 
Commission, Woodward Building, Washington. (Nicaragua.) 

Toby, George P., A. B. Leach & Co., New York (vice A. B. Leach). 
(Honduras.) 

Townley, Calvert, Westinghouse Electric & Manufacturing Co., 
East Pittsburgh. (Uruguay.) 

Travieso, Hon. Martin, Treasurer of Porto Rico. (Ecuador.) 

Untermyer, Samuel, Lawyer, New York. 

Vanderlip, Frank A., President National City Bank, New York. 
(Argentina.) 

Wade, F. J., Banker, St. Louis. (Panama.) 

Warburg, Hon. Paul M., Member Federal Reserve Board, 1704 
Eighteenth Street, Washington. (Brazil.) 

Warden, Charles W., First Vice President Continental Trust Co., 
Washington. (Guatemala.) 

Warfield, Edwin, President Fidelity Trust Co., Baltimore. (Do- 
minican Republic.) 

Warren, Charles B., President Board of Commerce, Detroit. (Vene- 
zuela.) 

Wells, Rolla, Governor Federal Reserve Bank, 300 North Broadway, 
St. Louis. (Paraguay.) 



PROGRAM AND LIST OF QUESTIONS. 51 

Wexler, Sol , President Whitney-Central National Bank, New Orleans. 

(Nicaragua.) 
Wheeler, Harry A., Vice President Union Trust Co., Chicago. 

(Uruguay.) 
White, J. G., President J. G. White & Co., New York. (Argentina.) 
Wiggin, A. H., Chase National Bank, New York. (Ecuador.) 
Williams, Hon. John Skelton, Comptroller of the Currency, 1712 H 

Street NW., Washington. 
Williams, R. Lancaster, Middendorf, Williams & Co., Baltimore. 

(Venezuela.) 
Willis, H. Parker, Secretary Federal Reserve Board, Washington. 
Wilson, Hon. William Bauchop, Secretary of Labor, 1600 T Street 

NW., Washington. 
Wilson, Dr. W. P., Director Commercial Museum, Philadelphia. 

(Salvador.) 
Wing, Daniel G., President First National Bank, Boston. (Brazil.) 
Wood, Edward Randolph, Vice President Philadelphia Board of 

Trade, Philadelphia. (Nicaragua.) 
Woolley, Hon. Robert W., Director of the Mint, Washington. 
Yanes, Francisco J., Assistant Director General Pan-American 

Union, Washington. (Venezuela.) 



ARGENTINA. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Samuel Hale Pearson. 

Official Delegation. 

Hon. Samuel Hale Pearson. 

Hon. Bjcardo C. Aldao. 

Hon. V. Villamil.* 

Special Guest of the Secretary of the Treasury. 
His Excellency the Argentine Ambassador. 

Representatives from the United States. 

Delano, Hon. F. A., Vice-Governor Federal Reserve Board, Wash- 
ington. 
Flood, Hon. Henry D., Member of Congress, Appomattox, Va. 
Gary, Elbert H., U. S. Steel Corporation, New York. 
Joy, Benjamin, National Shawmut Bank, Boston. 
SchifT, Mortimer L., Kulm, Loeb & Co., New York. 
Schmidt, George P., Schmidt & Gallatin, New York. 
Schoonmaker, S. L., American Locomotive Co., New York. 
Sherrill, Hon. Charles H., New York. 
Smith, Charles E. W., New York. 
Sulzberger, G. F., Sulzberger & Sons Co., New York. 
Vanderlip, Frank A., President National City Bank, New York. 
White, J. G., J. G. White & Co., New York. 

J. de Jara Almonte, Group Secretary. 

* Dr. Villamil and Mr. John E. Zimmermann attended the conference as representa- 
tives of the Buenos Aires Chamber of Commerce. 

52 



BOLIVIA. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Ignacio Calderon. 

Official Delegation. 

Hon. Ignacio Calderon. 
• Hon. Adolfo Ballivian. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Bolivia. 

Representatives from the United States. 

Hurley, Hon. Edward N., Federal Trade Co m mission, Washington. 
Bippus 7 W. F., Treasurer National Cash. Register Co., Dayton, Ohio. 
Elliott, Hon. Milton C, Counsel Federal Reserve Board, Washington. 
Fuerth, Otto H., New York. 

Goodhue, F. A., Vice President First National Bank, Boston. 
Hastings, S. M., Illinois Manufacturers' Association, Chicago. 
Holliday, John H., President Union Trust Co., Indianapolis. 
O'Neil, J. F., President Fulton Iron Works, St. Louis. 
Richards, George H., Remington Typewriter Co., New York. 
Speyer, James, Speyer & Co., New York. 
Storrow, James J., Boston. 

J. C. Luitweiler, Group Secretary. 

53 



BRAZIL. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Amaro Cavalcanti. 

Official Delegation. 

Hon. Amaro Cavalcanti.* 

Secretary of Delegation: Senhor Joaquim Pecejo. 

Special Guest of the Secretary of the Treasury. 
His Excellency the Brazilian Ambassador. 

Representatives from the United States. 

Warburg, Hon. Paul M., Federal Reserve Board, Washington. 
Cone, Caesar, Greensboro, N. C. 

Forgan, J. B. ; President First National Bank, Chicago. 
Horton, Elias Q., Otis Elevator Co. 
Lage, Frederic, New York. 
Kies, W. S., New York. 
Moore, Hon. John Bassett, New York. 
Morgan, J. P., J. P. Morgan & Co., New York. 
Rice, E. W., President General Electric Co., New York. 
Sutter, Charles S., St. Louis. 

Thomas, E. P., President United States Steel Products Co., New York. 
Wing, Daniel G., President First National Bank, Boston. 
Charles Ray Dean, Group Secretary. 

* Representing also trie International Chamber of Commerce of Brazil. 
54 



CHILE. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Luis Izquierdo. 

Official Delegation. 

Hon. Luis Izquierdo. 

Hon. Augusto Villanueva. 

Hon. Gonzalo Vergara Bulnes. 

Special Guest of the Secretary of the Treasury. 
His Excellency the Ambassador of Chile. 

Representatives from the United States. 

Hamlin, Hon. Charles S., Governor Federal Reserve Board, Wash- 
ington. 

Eaton, Frederick H., President American Power & Foundry Co., 
New York. 

Flint, Charles R., New York. 

Fredrick, Leopold, New York. 

Green, C. A., R. G. Dun & Co. 

Johnson, Alba B., President Baldwin Locomotive Works, Phila- 
delphia. 

Johnston, Archibald, First Vice President Bethlehem Steel Corpo- 
ration, New York. 

Norton, Charles D., First National Bank, New York. 

Roskob, John J., Treasurer E. I. du Pont de Nemours Powder Co. 

Ryan, John D., President Amalgamated Copper Co., New York. 
S. Martinez de Alva, Group Secretary. 

55 



COLOMBIA. 

CONFERENCE COMMITTEE. 

Chairman, 

Hon. Santiago Perez Triana. 

Official Delegation, 

Hon. Santiago Perez Triana. 
Hon. Eoberto Ancizar. 

Secretary of Delegation, Senor Gabriel Llopio. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Colombia. 

Representatives from the United States. 

Davies, Hon. Jos. E., Chairman Federal Trade Commission, Wash- 
ington. 

Gorrell, Frank E., Secretary National Canners' Association, Wash- 
ington. 

Hart, Francis R., Old Colony Trust Co., Boston. 

Meredith, E. T., Des Moines, Iowa. 

Muchnic, Charles, Manager Foreign Sales Department, American 
Locomotive Co., New York. 

Potter, W. C, Guaranty Trust Co., New York. 

Simmons, W. D., Simmons Hardware Co., Philadelphia. 

Straight, Willard, J. P. Morgan & Co., New York. 
J. A. Dunaway, Group Secretary. 
56 



COSTA RICA. 

CONFERENCE COMMITTEE. 

Chairman, 

Hon. Mariano Guardia Carazo. 

Official Delegation, 

Hon. Mariano Guardia Carazo. 
Hon. John M. Keith. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Costa Rica. 

Representatives from the United States. 

Newton, Hon. Byron R., Assistant Secretary, Treasury Department, 

Washington. 
Aerts, G. A., Export Manager Rudolph Wurlitzer Co., Cincinnati. 
Brand, Charles J., Department of Agriculture, 
de Lima, E. A., 58 West Eighth Street, New York. 
Hardy, Caldwell, Norfolk, Va. 

Harper, R. N., President District National Bank, Washington. 
Kelly, N. B., General Secretary Chamber of Commerce, Philadelphia. 
Kiler, Charles A., Champaign, 111. 

Pierson, Lewis E., President Austin Nichols Co., New York. 
Rich, John H., Minneapolis. 

Theo. G. Lurman, Jr., Group Secretary. 

57 



CUBA. 

CONFEBENCE COMMITTEE. 

Chairman. 

Hon. Pablo Desvernine y Galdos. 

Official Delegation. 

Hon. Pablo Desvernine y Galdos. 
Hon. Porfirio Franca y Alvarez de la Campa. 
Hon. Octavio Zayas y AdXn. 

Secretary of Delegation, Senor Juan A. Solberg. 

Special Guest of the Secretary of the Treasury. 
The Envoy Extraordinary and Minister Plenipotentiary Cuba. 

Representatives from the United States. 

Miller, Hon. Adolph C, Federal Eeserve Board, Washington. 
Brown, F. Q., Redmond & Co., New York. 
Conant, Charles A., New York. 
Esberg, A. I., New York. 

Farquhar, A. B., A. B. Farquhar & Co., New York. 
Fuller, Paul, New York. 

Loeb, Wm., jr., American Smelting & Refining Co., New York. 
Rhoads, Charles J., Governor Federal Reserve Bank, Philadelphia. 
C. H. Crennan, Group Secretary. 
58 



DOMINICAN REPUBLIC. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Francisco J. Peynado. 

Official Delegation. 

Hon. Francisco J. Peynado. 
Hon. Enrique Jimenez. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 
the Dominican Republic. 

Representatives from the United States. 

Fancher, E. R., Governor Federal Reserve Bank, Cleveland. 
Emerson, Guy, New York. 

Falconer, Charles E., President Merchants & Manufacturers' Asso- 
ciation, Baltimore. 
Hollander, Prof. J. H., Johns Hopkins University, Baltimore. 
Jordan, G. G., Columbus. 

Penny, David H. G., Vice President Irving National Bank, New York. 
Pepper, Charles M., Washington. 
Rhett, R. G., Charleston, S. C. 
Saunders, W. L., Ingersoll, Rand Co., New York. 
Warfield, Edwin, Baltimore. 

Dr. G. A. Sherwell, Group Secretary. 

59 



ECUADOR. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Juan Cueva Garcia. 

Official Delegation. 

Hon. Juan Cueva Garcia. 

Hon. Vicente Gonzales B. 

Hon. Enrique Gallardo. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary op 

Ecuador. 

Representatives from the United States. 

Parry, Hon. Will H., Federal Trade Commission, Washington. 
Clausen, John, Crocker National Bank, San Francisco. 
Conklin, Franklin, Newark, N. J. 

Given, T. H., President Farmers' Deposit & National Bank. 
Kent, Fred I., Vice President Bankers' Trust Co., New York. 
McChord, Joseph A., Governor Federal Keserve Bank, Atlanta. 
Tedcastle, A. W., Boston. 

Travieso, Hon. Martin, Treasurer of Porto Rico. 
Wiggin, A. H., Chase National Bank, New York. 
Charles F. Baker, Group Secretary. 

60 



GUATEMALA. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Victor Sanchez Ocana. 

Official Delegation. 

Hon. Victor Sanchez Ocana. 

Hon. Carlos Herrera. 

Hon. Juan S. Lara. 

Secretary of Delegation, Lie. Vikgilio Rodriguez Bbteta. 

Special Guest oftlie Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Guatemala. 

Representatives from the United States. 

Malburn, Hon. Wm. P., Assistant Secretary, Treasury Department, 

Washington. 
Francis, Hon. David R. 

Jay, Pierre, Chairman Federal Reserve Bank, New York. 
Minotto, James, Guaranty Trust Co., New York. 
Perry, Marsden J., Providence. 
Ruperti, J., G. Amsinck & Co., New York. 
Shapleigh, A. L., President Commercial Club, St. Louis. 
Swiggett, Dr. Glen L., Pan-American Union, Washington. 
Warden, Charles W., First Vice President Continental Trust Co., 

Washington. 

H. N. Branch, Group Secretary. 

61 



HONDURAS. 

CONFERENCE COMMITTEE. 

Chairman. 
Hon. Leopoldo Cordova. 

Official Delegation. 

Hon. Leopoldo Cordova. 
Hon. Daniel FortIn. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Honduras. 

Representatives from the United States. 

Strong, Benjamin, Jr., Governor Federal Reserve Bank, New York. 
DeLanoy, William C, Director Bureau of War Risk Insurance, 

Treasury Department, Washington. 
Fisher, Edmund D., City Deputy Comptroller, New York. 
Galliher, W. T., President American National Bank, Washington. 
Goldstein, L. S., New Orleans. 
Harris, A. M., Harris, Forbes & Co., New York. 
Imhoff, C. H., Vice President Irving National Bank, New York. 
Jones, De Witt Clinton, American Dyewood Co., New York. 
McCrosky, James Warren, J. G. White & Co., New York. 
Toby, Geo. P., A. B. Leach & Co., New York. 

Esteban S. Garcia, Group Secretary. 
62 



NICARAGUA. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Pedro Rafael Cuadra. 

Official Delegation. 

Hon. Pedro Rafael Cuadra. 
Hon. Albert Strauss. 
Hon. Clifford D. Ham. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Nicaragua. 

Representatives from the United States. 

Ingle, Wm., Chairman Federal Reserve Bank, Richmond. 

Austin, Richard L., Chairman Federal Reserve Bank, Philadelphia. 

Brown, James, Brown Bros. & Co., New York. 

Nunisen, George N., President National Canners' Association, Balti- 
more. 

Parker, Walter, Manager New Orleans Chamber of Commerce. 

Rossell, John S., Vice President Security Trust & Safe Deposit Co., 
Wilmington, Del. 

Thompson, Hon. Arthur, Woodward Building, Washington. 

Wexler, Sol, President Whitney-Central National Bank, New Orleans. 

Wood, E. R., Vice President Board of Trade, Philadelphia. 
A. Gonzalez-Lamas, Group Secretary. 

63 



PANAMA. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Aristides Arjona. 

Official Delegation. 

Hon. Aristides Arjona. 
Hon. Ramon F. Acevedo. 
Hon. Ramon Arias, Jr. 

Secretary of Delegation, Senor W. R. Wilford. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Panama. 

Representatives from the United States. 

Miller, J. Z., Jr., Chairman Federal Reserve Bank, Kansas City. 
Clapham, A. G., President Commercial National Bank, Washington. 
Coolidge, J. Randolph, Boston. 
Crane, Charles R., Chicago. 

Howard, A. B., American Express Co., Washington. 
Norris, George W., Philadelphia. 

Reynolds, Hon. James B., National Association of Cotton Manufac- 
turers, Washington. 
Wade, F. J., St. Louis. 

Walter S. Penfield, Group Secretary. 
64 



PARAGUAY. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Hector Velazquez. 

Official Delegation. 

Hon. Hector Velazquez. 
Hon. William Wallace White. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Paraguay. 

Representatives from the United States. 

Wells, Rolla, Governor Federal Reserve Bank, St. Louis. 

Boyd, L. C, Indianapolis. 

de Navarro, Alfonso, Vice President Atlas Portland Cement Co., 
New York. 

Erskine, A. R., South Bend, Ind. 

Fahey, John H., President U. S. Chamber of Commerce, Boston, Mass. 

Hepburn, A. B., Chase National Bank, New York. 

Maddox, Robert F., American National Bank, Atlanta. 

Martin, Wm. McC, Chairman Federal Reserve Bank, St. Louis. 

Olcott, Hon. J. Van Vechten, President Pan-American States Asso- 
ciation, New York. 

Patchin, Robert H., New York. 

Harold Clarkson, Group Secretary. 

65 
98257°— 15 5 



PERU. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Isaac Alzamora. 

Official Delegation. 

Hon. Isaac Alzamora. 
Hon. Eduardo Higginson. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary 

of Peru. 

Representatives from the United States. 

Harding, Hon. W. P. G., Federal Reserve Board, Washington. 
Allen, F. W., Old Colony Trust Co., Boston. 
Arnold, J. J., First National Bank, Chicago. 
Babson, Roger W., Boston. 
Douglas, Wm. H., New York. 
Duval, G. L., Wessell Duval & Co., New York. 
Fairchild, Samuel W., Fairchild Bros. & Foster, New York. 
Grace, Joseph P., New York. 

Kretz, George H., National Park Bank, New York. 
Meeker, Arthur, Armour Grain Co., Chicago. 
Mitchell, C. D., President Chattanooga Plow Co., Chattanooga. 
Reynolds, Geo. M., Commercial & Continental National Bank, 
Chicago. 

Dr. Harry Erwin Bard, Group Secretary. 
66 



SALVADOR. 

CONFEKENCE COMMITTEE. 

Chairman. 

Hon. Alfonso Quinonez M. 

Official Delegation. 

Hon. Alfonso Quinonez M. 

Hon. Jose E. Suay. 

Hon. Roberto Agttilar. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Salvador. 

Representatives from the United States, 

Burke, Hon. John, Treasurer of the United States. 

Ardrey, J. Howard, City National Bank, Dallas, Texas. 

Curtiss, Frederic R., Chairman Federal Reserve Bank, Boston. 

Deans, H. G. P., Merchants' Loan & Trust Co., Chicago. 

Goodwin, Elliot H., Secretary United States Chamber of Commerce, 

Washington. 
McQueen, H. C, Wilmington, N. C. 

Nickerson, J. F., Vice President Association of Commerce, Chicago. 
Rowe. W. S., President First National Bank, Cincinnati. 
Wilson, Dr. W. P., Director Commercial Museum, Philadelphia. 
Constantine E. McGuire, Group Secretary. 

67 



URUGUAY. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Pedro Cosio. 

Official Delegation. 

Hon. Pedro Cosio. 

Hon. Gabriel Terra. 

Hon. Carlos Maria de Pena. 

Secretary of Delegation, Senor Jose Richling. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Uruguay. 

Representatives from the United States. 

Rublee, Hon. George, Federal Trade Commission, Washington. 
Bixby, William K., American Car & Foundry Co., St. Louis. 
Butterworth, William, President Deere & Co., Moline, 111. 
Eldridge, H. E,., Vice President National City Bank, New York. 
Greystad, Hon. N. A., U. S. E. E. & M. P. to Paraguay and Uruguay. 
Keith, Charles S., Keith & Perry, Kansas City. 
Le Gendre, William C, New York. 
O'Brien, Edw. C, New York. 

Rovensky, J. F., National Bank of Commerce, New York. 
Shirley, James J., T. A. Gillespie Co., New York. 
Townley, Calvert, Westinghouse Electric & Mfg. Co., East Pittsburgh. 
Wheeler, Harry A., Vice President Union Trust Co., Chicago. 
Genaro Silva Rodriguez, Group Secretary. 
68 



VENEZUELA. 

CONFERENCE COMMITTEE. 

Chairman. 

Hon. Pedro Rafael Rincones. 

Official Delegation. 

Hon. Pedro Rafael Rincones. 

Special Guest of the Secretary of the Treasury. 

The Envoy Extraordinary and Minister Plenipotentiary of 

Venezuela. 

Representatives from the United States. 

Harris, Hon. William J., Federal Trade Commission, Washington. 
Cornell, Charles L., Treasurer Niles-Bement-Pond Co., New York. 
Edson, John Joy, Washington Loan & Trust Co., Washington. 
Lyerly, Charles A., President First National Bank, Chattanooga. 
Owens, Dr. Clarence J., Southern Commercial Congress, Washington 
Price, Theodore H., New York. 
Sachs, Samuel, Goldman, Sachs & Co., New York. 
Warren, Charles B., President Board of Commerce, Detroit. 
Williams, R. Lancaster, Middendorf, Williams & Co., Baltimore. 
Yanes, Francisco J., Assistant Director Pan-American Union, Wash- 



ington. 



H. Ralph Ringe, Group Secretary. 



GENERAL COMMITTEE ON UNIFORMITY OF LAWS RELATING 
TO TRADE COMMERCE AND INTERNATIONAL COMMER- 
CIAL COURT. 

Chairman, Hon. William C. Redfield. 

Senor Dr. Samuel Hale Pearson _ _ .Argentina. 

Senor Dr. Ignacio Calderon Bolivia. 

Senhor Dr. Amaro Cayalcanti __ Brazil. 

Senor Dr. Luis Izquierdo „ Chile. 

Senor Dr. Santiago Perez Triana Colombia. 

Senor Dr. Roberto Anolzar Colombia. 

Senor Dr. John M. Keith Costa Rica. 

Senor Dr. Pablo Desvernine y Galdos. _ .Cuba. 

Senor Dr. Francisco J. Peynado. _ __' Dominican Republic. 

Senor Dr. Vicente Gonzales B Ecuador. 

Senor Dr. Juan S. Lara _ Guatemala. 

Senor Dr. Leopoldo Cordova Honduras. 

Senor Dr. Pedro Rafael Cuadra. Nicaragua. 

Senor Dr. Ramon F. Acevedo Panama. 

Senor Dr. William Wallace White _ .Paraguay. 

Senor Dr. Isaac Alzamora __ I Peru. 

Senor Dr. Alfonso QuifLonez M Salvador. 

Senor Dr. Carlos Maria de Pena .Uruguay. 

Senor Dr. Pedro Rafael Rincones Venezuela. 

MEMBERS REPRESENTING THE UNITED STATES. 

The Honorable Charles S. Hamlin. 

The Honorable John Barrett. 

The Honorable Charles A. Conant. 

The Honorable D. R. Francis. 

The Honorable John Hays Hammond. 

The Honorable John Basse tt Moore. 

The Honorable Robert W. Woolley. 

Mr. George H. Numsen. 

Mr. W. L. Saunders. 

M. Willard Straight. 

Mr. Benjamin Strong, Jr. 

Mr. Samuel Untermyer. 

Claud De Baun, Secretary. 
70 



GENERAL COMMITTEE ON TRANSPORTATION AND COM- 
MUNICATION. 

Argentine Delegation: 

Senor Dr. Samuel Hale Pearson. 
Senor Dr. Ricardo C. Aldao. 
Senor Dr. V. ViUamil. 
Senor John E. Zinimermann. 

Brazilian Delegation: 

Senhor Dr. Amaro Cavalcanti. 

Chilean Delegation: 

Senor Dr. Luis Izquierdo. 
Senor Dr. Augusto Villanueva. 
Senor Dr. Gonzalo Vergara Bulnes. 

Ecuadorean Delegation: 

Senor Dr. Vicente Gonzales B. 

Peruvian Delegation: 

Senor Dr. Isaac Alzamora. 
Senor Dr. Eduardo Higginson. 

Uruguayan Delegation: 
Senor Dr. Pedro Cosio. 
Senor Dr. Gabriel Terra. 
Senor Dr. Carlos Maria de Pena. 

Representatives of the United States: 
The Honorable D. R. Krancis. 
The Honorable Edward N. Hurley. 
Mr. Franklin Q. Brown. 
Mr. Paul Fuller. 
Mr. George W. Norris. 
Mr. R. Goodwin Rhett. 
Mr. Sol Wexler. 
Mr. Harry A. Wheeler. 
Mr. J. G. White. 

Claud De Baun, Secretary. 

71 



SECRETARY GENERAL OF THE PAN AMERICAN 
FINANCIAL CONFERENCE, 

L. S. Kowe, LL. D. 



ASSISTANT SECRETARIES GENERAL, 

William Franklin Sands. 

Basil Miles. 

J. S. Gittings, Jr. 

J. Brooks B. Parker. 



BUREAU OF INFORMATION. 

The attention of the members of the Conference is called to the fact that the Secre- 
tary General has established two offices, one at the Pan American Union (Phone Main 
6638, Branch 8) and the other at the Hotel Shoreham (Phone Main 8460). 

The Secretary General and the Assistant Secretaries General are at the service of 
members for such further information as they may wish to secure concerning the 
Conference. # 

72 



ANNOUNCEMENT. 

The Secretary of the Treasury desires to avail himself of the oppor- 
tunity furnished by the publication of this program to express to 
the official delegates, as well as to the invited guests, his sincere 
appreciation of the warm reception accorded throughout the countries 
of the American continent to the idea of convening a Pan American 
Financial Conference. The enthusiastic response to the invitations 
indicates that the time is ripe for the establishment of closer financial 
relations between the people of the United States and the nations 
of Central and South America. 

In order that these Conferences may be productive of important 
and permanent results, the Secretary, interpreting what he believes 
to. be the wish of the members of the Conference, has arranged to 
have a group of eminent financiers and leading business men of the 
United States meet with each of the delegations from the sister 
Republics. 

In a sense, therefore, the Conference will partake of the nature of 
a series of meetings between the official delegates of the Republics 
invited to participate in the Conference and the representatives of 
the Secretary of the Treasury. To make this purpose effective, it 
has been deemed best to reduce to a minimum the number of joint 
sessions, and to give as much time as possible to the Group or Com- 
mittee Conferences. 

After careful consideration, the Secretary begs to suggest the fol- 
lowing questions for the consideration of the Group Committees, and 
indulges the hope that the meetings of these Committees will afford 
the opportunity for a free and frank interchange of opinion. The 
meetings may be of a private and confidential nature, but it is hoped 
that at the final session the delegates from each of the countries 
represented at the Conference will submit a report of such of the 
proceedings and conclusions of the Group Committees or Confer- 
ences as they may deem advisable, in order that these reports may 
be published in the proceedings of the Conference. 

73 



QUESTIONS SUGGESTED BY THE SECRETARY OF THE 
TREASURY FOR THE CONSIDERATION OF THE GROUP 
COMMITTEES. 

I. Public Finance. 

(a) Public Revenues and Expenditures as Affected by Recent Events 

in Europe. 

(b) Measures Adopted to Meet the Situation. 

(c) Proposed Remedies. 

(d) Possibilities of International Cooperation. 

II. The Monetary Situation. 

(a) Conditions Prior to the Outbreak of the European War. 

(b) Effects of the War. 

(c) Possibilities of International Cooperation. 

(d) Outlook for Uniform Monetary Standards. 

III. The Present Banking Situation. 

(a) Conditions Existing Prior and Subsequent to the Outbreak of the 

European War. 

(b) The Establishment of Branch Banks and of Direct Exchange. 

(c) Possibilities of Further International Cooperation. 

IV. The Financing of Public Improvements. 

(a) The Underwriting of National Loans. 

(b) The Underwriting of Provincial or State Loans. 

(c) The Underwriting of Municipal Loans. 

(d) The Relation of Public Credit to a Well Organized System of 

Taxation and a Balanced Budget. 

V. The Financing of Private Enterprises. 

(a) The Present Needs of Public Service Companies, such as Rail- 
road, Street Railway, Electric Light, Gas, and Power Com- 
panies. 

(jb) The Needs of Merchants and Manufacturers. 

(c) The Financing of Seasonable Crops. 

(d) The Consideration of Plans to Secure a More Satisfactory Status 

for Collateral as Security for Commodity Loans. 

(e) The Possibility of Securing Greater Uniformity in Laws Relating 

to Trade and Commerce, in Customs Regulations, and the 
More Effective Protection of Trade-Marks. 

74 



PEOGEAM AND LIST OP QUESTIONS. 75 

VI. The Extension of Inter-Amebican Markets. 

(a) Long Term Credits as a Means of Stimulating Inter-American 

Trade. 

(b) Acceptances and Discounts (including warehouse receipts) as a 

Means of Extending Inter- American Trade. 

(c) The Establishment of Direct Exchange (often referred to as 

" dollar exchange") as a Means of Extending American 
Trade. 

(d) The Adaptation of the Manufactured Products of the United 

States" to the Needs of the Nations of Central and South 
America. 
(<?) Tariff Laws as Affecting Trade with the United States. 

VII. Merchant Marine and Improved Transportation 

Facilities. 

(a) Increased and Improved Ocean Transportation Facilities. 

1. The present needs in this respect. 

2. Statement of shipping facilities now enjoyed. 

3. Suggestions as to the best means of securing improved 

transportation service. 

4. What public or private encouragement for improved trans- 

portation facilities can be expected from the countries 
represented at the Conference. 
(6) Improved Postal Facilities (including Money Orders) and Parcel 
Post. 



76 pan american financial conference. 

First General Session. 
Monday Morning, May 24th, 10 o'clock. 

HALL OF THE AMERICAS, PAN AMERICAN UNION. 

The Secretary of the Treasury, Presiding. 

I. Address of welcome to delegates and guests by the President 
of the United States. 
II. Welcome by the Honorable William J. Bryan, Secretary of 
State. 
III. Responses on behalf of the Governments represented at the 
Conference. 

The Secretary of the Treasury desires to announce that the families of members of the 
Conference are cordially invited to the opening session. 



MONDAY AFTERNOON, MAY 24TH, 

12.15 O'CLOCK. 

THE PRESIDENT OF THE UNITED STATES WILL RECEIVE THE 

MEMBERS OF THE CONFERENCE AND THEIR 

FAMILIES AT THE WHITE HOUSE. 



Second General Session. 
Monday Afternoon, May 2Jfth, 2.30 o'clock. 

HALL OF THE AMERICAS, PAN AMERICAN UNION. 

I. Address of the Honorable William G. McAdoo, Secretary of 
the Treasury. 
II. Address of the Honorable Albert S. Burleson, Postmaster 
General. 

III. Address of the Honorable William C. Redfield, Secretary of 

Commerce. 

IV. Addresses by members of the Conference. 

V. Announcement of Group Committees by the Secretary of the 
Treasury. 

Monday Evening, May 24th, 9 o'clock. 

PAN AMERICAN BUILDING. 

Reception tendered by the Secretary of State and the Secretary 
of the Treasury to members of the Conference, their families, and 
invited guests. 



peogeam and list of questions. 77 

Third Geneeal Session. 
Tuesday Morning, May 25th, 10 o'clock. 

HALL OF THE AMERICAS, PAN AMEEICAN UNION. 

I. Address of the Honorable Charles S. Hamlin, Governor of the 
Federal Reserve Board. 

II. Address of the Honorable Paul M. Warburg, member of the 
Federal Reserve Board, Washington. 

III. Addresses by members of the Conference. 



Tuesday Afternoon, May 25th, 1 o'clock. 

Luncheon tendered by the Secretary of State to delegates from — 

Argentina. Colombia. 

Bolivia. Costa Rica. 

Brazil. Cuba. 

Chile. Dominican Republic. 

Equador. 

Residence of the Secretary of State, Calumet Place. 

Automobiles will leave the Pan American Union at 12.45 o'clock. 



Tuesday Afternoon, May 25th, 2.80 o'clock. 

Meetings of Group Conferences in Special Conference Rooms 
assigned for this purpose at the Hotel Shoreham. 



Room. 

Argentina 99 

Bolivia 101 

Brazil 102 

Chile 104 

Colombia 105 

Costa Rica 106 

Cuba 107 

Dominican Republic 108 

Ecuador 109 



Room. 

Guatemala 110 

Honduras Ill 

Nicaragua 112 

Panama ; 114 

Paraguay 115 

Peru 116 

Salvador 126 

Uruguay 127 

Venezuela 129 



Tuesday Afternoon, May 25th, 5 o'clock. 

Reception tendered by His Excellency, the Argentine Ambas- 
sador, Honorable Romulo S. Naon, to delegates on the occasion of 
the one hundred and fifth anniversary of the Argentine independ- 
ence, Argentine Embassy, 1600 New Hampshire Avenue. 



78 PAN AMERICAN FINANCIAL CONFERENCE. 

Wednesday Morning, May 26th, 10 o'clock. 



HOTEL SHOREHAM. 



Group Conferences meet in the same Committee Rooms assigned for 
this purpose at Hotel Shoreham. 



Wednesday Afternoon, May 26th, 1 o'clock. 
Luncheon tendered by the Secretary of State to delegates from — 

Guatemala. Paraguay. 

Honduras. Peru. 

Nicaragua. Salvador. 

Panama. Uruguay. 

Venezuela. 

Residence of the Secretary of State, Calumet Place. 
Automobiles will leave the Hotel Shoreham at 12.45 o'clock. 



Wednesday Afternoon, May 26th, S o'clock. 

HOTEL SHOREHAM. 

Group Conferences meet in the Special Co m mittee Rooms assigned 
for this purpose at Hotel Shoreham. 



Wednesday Afternoon, May 26th, 5 o'clock. 

MOTOR TRIP AROUND PARKS AND TO CHEVY CHASE CLUB. 

Automobiles will leave the Hotel Shoreham at 5 o'clock and go by 
way of Sixteenth Street and Columbia Road into Adams Mill Road. 
This leads directly through the National Zoological Park and thence 
into Rock Creek Park. After seeing the latter, automobiles will 
proceed to the north end of the park and thence to Chevy Chase 
Club, returning via Tenallytown Road and Massachusetts Avenue 
to the hotel. 

TEA AT CHEVY CHASE CLUB, 5.30 O'CLOCK. 

Tea given by members of the Federal Reserve Board to delegates 
and guests of the Conference at the Chevy Chase Club. 



program and list of questions. 79 

Fourth General Session. 
Thursday Morning, May 27th, 10 o'clock. 

HALL OF THE AMERICAS, PAN-AMERICAN UNION. 

I. Address by the Honorable Joseph E. Davies, Chairman of the 

Federal Trade Commission. 
II. Address by the Honorable John Barrett, Director General of 

the Pan American Union. 
III. Consideration of such matters as may be presented by members 
of the Conference. At the general sessions delegates and 
guests are urged to express themselves freely on any questions 
or matters they may desire to discuss. 



Thursday Afternoon, May 27th, 1 o'clock. 

PAN AMERICAN UNION. 

Luncheon tendered by the Secretary of the Treasury to members 
of the Conference. 



Thursday Afternoon, May 27th, 3 o'clock. 

EXCURSION TO MOUNT VERNON. 

The President of the United States has tendered to the members 
of the Conference the use of The Mayflower, which will start at 3.30 
o'clock from the Navy Yard for Mount Vernon, Virginia, the home 
of George Washington, first President of the United States. 

Automobiles will leave the Hotel Shoreham at 3 o'clock. 



Friday Morning, May 28th, 10 o'clock. 

HOTEL SHOREHAM. 

Group Conferences meet in Special Committee Rooms assigned 
for this purpose at Hotel Shoreham. 



Fifth General Session. 

Friday Afternoon, May 28th, 8 o'clock. 

hall of the americas, pan american union. 

Reports of Conference Committees. 

It is not intended to limit the time for reports to this date. Only 
such reports need be submitted at this meeting as may be ready. 



80 PAN AMERICAN FINANCIAL CONFERENCE. 

Friday Afternoon, May 28th, 4..8O o'clock. 

The members of the Conference and their families will be the 
guests of the Secretary of War, the Honorable Lindley M. Garrison. 

TRIP TO FORT MYER 

Automobiles will leave the Pan-American Union Building promptly 
at 4.30 o'clock, and will proceed direct to Fort Myer, where a special 
drill has been ordered by the Secretary of War in honor of the mem- 
bers of the Conference. The return to the Shoreham will be made 
immediately after the drill. 

The Secretary of the Treasury desires to request that the families 
of members of the Conference meet at the Pan-American Union 
Building at 4.15 o'clock. Automobiles will be at their service at the 
Hotel Shoreham at 4 o'clock. 



Sixth General Session. 
Saturday Morning, May 29ih, 10 o'clock. 

HALL OF THE AMERICAS, PAN AMERICAN UNION. 

I. Reports of Conference Committees. 
II. Closing Address by the Secretary of the Treasury. 
III. Close of the Conference. 



Saturday Afternoon, May 29th, 5.30 o'clock. 

Mrs. John B. Henderson will be At Home at 5.30 o'clock Satur- 
day afternoon, May 29th, at her residence, Sixteenth Street and 
Florida Avenue, in honor of the members of the Pan-American 
Financial Conference. 

Automobiles will leave the Shoreham at 5.15 o'clock. 



Saturday Evening, May 29th, 8 o'clock. 

HALL OF THE AMERICAS, PAN AMERICAN UNION. 

Banquet tendered to members of the Conference by the Secretary 
of the Treasury. 

Sunday, May 80th, 12 o'clock. 

Breakfast tendered by the Assistant Secretary of the Treasury 
and Mrs. Peters to official delegations and their families. 

AT "WOODLEY," WOODLEY LANE. 

Automobiles leave the Shoreham Hotel at 11.45 o'clock. 



PROGRAM AND LIST OF QUESTIONS. 

Monday, May 31st-Sunday, June 13th. 

ITINERARY. 



81 



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List of Cities. 

Monday, May 31st, 1915. 

Via W., B. & A. Electric Railroad. 

Lv. Washington, D. C 9.05 A. M. 

Ar. Annapolis, Md 10.35 A. M. 

Lv. Annapolis, Md 12 M. 

At. Baltimore, Md 1.10 P. m! 

Luncheon and Dinner, Baltimore. 

Tuesday, June 1st, 1915. 

Via Pennsylvania Railroad. 

Lv. Baltimore, Md 1.30 A. M. 

Ar. Philadelphia (Broad Street Station) 4.00 A. M. 

Wednesday, June 2d, 1915. 

Luncheon and Dinner on train. 

Lv. Philadelphia, Pa 1.00 P.M. 

Ar . Pittsburgh, Pa 10.00 P. M. 

Friday, June Jfth, 1915. 

Via Pennsylvania Lines. 
Luncheon, Dinner, and Breakfast on train. 

Lv. Pittsburgh, Pa 1.00 P. M. 

93257°— 15 6 



82 PAN AMEKICAN FINANCIAL CONFEEENCE. 

Saturday, June 5th, 1915. 
Ar. St. Louis, Mo 9.00 A.M. 

Sunday, June 6th, 1915. 

Via Wabash Railroad. 
Dinner on train. 

Lv. St. Louis, Mo 3.00 P. M. 

Ar. Chicago, 111 10.00 P. M. 

Tuesday, June 8th, 1915. 

Via Michigan Central R. R. 
Lv. Chicago, 111. 11.00 P. M. 

Wednesday, June 9th, 1915. 

Breakfast. 

Ar. Detroit, Mich 8.30 A. M. 

Lv. Detroit, Mich 11.00 P.M. 

Thursday, June 10th, 1915. 

Ar. Niagara Falls, N. Y 8.00 A. M. 

By motor cars. 

Lv. Niagara FaUs, N. Y 4.00 P. M. 

Ar. Buffalo, N. Y 5.00 P.M. 

Friday, June 11th, 1915. 

Via New York Central Lines. 

Breakfast and Luncheon. 

Lv. Buffalo, N. Y 12.30 Night. 

Ar. Schenectady, N. Y 8.00 A. M. 

Lv. Schenectady, N. Y 12.30 Noon. 

Ar. Boston, Mass 6.10 P. M. 

Sunday, June 13th, 1915. 

ViaN. Y.,N. H. & H. R. R. 

Luncheon and Dinner. 

Lv. Boston, Mass. (South Station) 3.00 P. M. 

Ar. New York (Grand Central Station) 9.00 P. M. 



PROCEEDINGS OF THE GENERAL 

SESSIONS 



83 



OPENING SESSION 



MONDAY MORNING, MAY 24, 1915 



85 



OPENING SESSION, MONDAY MORNING MAY 24. 



The Conference was called to order at 10 o'clock a. m. by the 
Honorable William G. McAdoo, Secretary of the Treasury of the 
United States. 

Secretary McAdoo. Ladies and gentlemen, I have the honor to 
introduce the President of the United States. [Loud applause.] 

ADDRESS OF THE PRESIDENT OF THE UNITED STATES. 

Mr. Chairman, Gentlemen of the American Eepublics, Ladies, 
and Gentlemen: 

The part that falls to me this morning is a very simple one, but a 
very delightful one. It is to bid you a very hearty welcome indeed 
to this conference. The welcome is the more hearty because we are 
convinced that a conference like this will result in the things that 
we most desire. I am sure that those who have this conference in 
charge have already made plain to you its purpose and its spirit. 
Its purpose is to draw the American Eepublics together by bonds 
of common interest and of mutual understanding [applause] ; and we 
comprehend, I hope, just what the meaning of that is. There can be 
no sort of union of interest if there is a purpose of exploitation by any 
one of the parties to a great conference of this sort. The basis of 
successful commercial intercourse is common interest, not selfish 
interest. It is an actual interchange of services and of values : it is 
based upon reciprocal relations and not selfish relations. It is based 
upon those things upon which all successful economic intercourse 
must be based, because selfishness breeds suspicion; suspicion, hos- 
tility ; and hostility, failure. We are not, therefore, trying to make 
use of each other, but we are trying to be of use to one another. 
[Applause.] 

It is very surprising to me, it is even a source of mortification, that 
a conference like this should have been so long delayed, that it should 
never have occurred before, that it should have required a crisis of 
the world to show the Americas how truly they were neighbors to 
one another. If there is any one happy circumstance, gentlemen, 
arising out of the present distressing condition of the world, it is 
that it has revealed us to one another : it has shown us what it means 

87 



88 PAN AMERICAN FINANCIAL CONFERENCE. 

to be neighbors. And I cannot help harboring the hope, the very 
high hope, that by this commerce of minds with one another, as well 
as commerce in goods, we may show the world in part the path to 
peace. It would be a very great thing if the Americas could add to 
the distinction which they already wear this of showing the way to 
peace, to permanent peace. [Applause.] 

The way to peace for us, at any rate, is manifest. It is the kind 
of rivalry which does not involve aggression. It is the knowledge 
that men can be of the greatest service to one another, and nations 
of the greatest service to one another, when the jealousy between 
them is merely a jealousy of excellence, and when the basis of their 
intercourse is friendship. [Applause.] There is only one way in 
which we wish to take advantage of you and that is by making better 
goods [applause], by doing the things that we seek to do for each 
other better, if we can, than you do them, and so spurring you on, if 
we might, by so handsome a jealousy as that to excel us. I am so 
keenly aware that the basis of personal friendship is this competition 
in excellence, that I am perfectly certain that this is the only basis 
for the friendship of nations, — this handsome rivalry, this rivalry in 
which there is no dislike, this rivalry in which there is nothing but 
the hope of a common elevation in great enterprises which we can 
undertake in common. 

There is one thing that stands in our way among others — for you 
are more conversant with the circumstances than I am; the thing 
I have chiefly in mind is the physical lack of means of communi- 
cation, the lack of vehicles, — the lack of ships, the lack of established 
routes of trade, — the lack of those things which are absolutely neces- 
sary if we are to have true commercial and intimate commercial 
relations with one another; and I am perfectly clear in my judgment 
that if private capital cannot soon enter upon the adventure of 
establishing these physical means of communication, the govern- 
ment must undertake to do so. [Applause.] We cannot indefinitely 
stand apart and need each other for the lack of what can easily be 
supplied, and if one instrumentality cannot supply it, then another 
must be found which will supply it. We cannot know each other un- 
less we see each other ; we cannot deal with each other unless we com- 
municate with each other. So soon as we communicate and are upon 
a familiar footing of intercourse, we shall understand one another, 
and the bonds between the Americas will be such bonds that no 
influence that the world may produce in the future will ever break 
them. [Applause.] 

If I am selfish for America, I at least hope that my selfishness is 
enlightened. The selfishness that hurts the other party is not en- 
lightened selfishness. If I were acting upon a mere ground of selfish- 
ness, I would seek to benefit the other party and so tie him to myself ; 



PROCEEDINGS. 80 

so that even if you were to suspect me of selfishness, I hope you will 
also suspect me of intelligence and of knowing the only safe way for 
the establishment of the things which we covet, as well as the estab- 
lishment of the things which we desire and which we would feel 
honored if Ave could earn and win. 

I have said these things because they will perhaps enable you to 
understand how far from formal my welcome to this body is. It is 
a welcome from the heart, it is a welcome from the head ; it is a wel- 
come inspired by what I hope are the highest ambitions of those 
who live in these two great continents, who seek to set an example 
to the world in freedom of institutions, freedom of trade, and intelli- 
gence of mutual service. [Loud and prolonged applause.] 

Secretary McAdoo. Ladies and gentlemen, I now have the honor 
of introducing the Secretary of State, the Honorable William J. 
Bryan. [Applause.] 

ADDRESS OF HON. WILLIAM J. BRYAN", SECRETARY OF STATE. 

Mr. President, Mr. Secretary, Representatives of Pan America, 
Ladies, and Gentlemen : 

If you will consult the program you will find that I am to deliver 
an address of welcome, but it is superfluous for me to welcome you 
after the eloquent and appropriate words to which you have just 
listened. On ordinary occasions the Secretary' of State, as the 
President's representative in dealing with foreign nations, welcomes 
visitors, but this is not an ordinary occasion — it is an epoch-making 
event, and it was fitting, therefore, that the welcome should be 
spoken by the President himself and not by a representative. If 
the welcome extended to you was to be as whole-souled as that 
expressed in the Spanish phrase which, translated into English, 
means "my house is your house," it must come from the occu- 
pant of the White House. [Applause.] My only dut}^, as I see it, 
after the felicitous words have been addressed to you by the Presi- 
dent, is to give cordial approval to the noble idea, conceived by the 
Honorable Secretary of the Treasury, which has resulted in this 
notable gathering. I do give emphatic indorsement to this idea and 
expect this conference to have lasting and far-reaching results. I 
shall content myself with presenting the one thought that has been 
uppermost in my mind since this idea was presented to our Nation 
and to the nations assembled here. It is the idea that we are 
neighbors. 

God in His providence has made these Republics the joint tenants 
of that wonderful heritage which extends from the St. Lawrence 
and Puget Sound on the north to Cape Horn on the south. We 
have taken upon ourselves the responsibility of developing this 



90 PAN AMERICAN FINANCIAL CONFERENCE. 

territory for ourselves and for the world. It is dedicated to a sys- 
tem of government — to the republican form of government. May I 
not describe these Eepubiics as resembling a great banyan tree ? The 
United States is the parent stem; the branches, extending to the 
south, have taken root in the soil and are now permanent supports — 
yes, important parts — of that great tree. Linked together by a unity 
of political purpose and by a common political ideal these Eepubiics 
can not but be interested in each other. We are geographically so 
situated that we must live side by side, and certain expectations are 
aroused by the very fact that we are neighbors. 

The first is that we shall know each other. Neighbors should 
become acquainted, and this great meeting must result in an extension 
of acquaintance which is not only desirable, but necessary. I am sure 
that the Secretary of the Treasury had in mind this more intimate 
association ; as we know each other better we shall be more and more 
assured of the good will of each toward the other. 

The second expectation aroused by the fact that we are neighbors 
is that we shall be friends. This feeling of friendship is growing 
and will continue to grow. Time tends to increase it and words 
spoken by the representatives of the several nations have promoted 
its growth. The memorable address delivered by our Chief Execu- 
tive at Mobile a year ago, when he restated what has been so often 
stated before, that this Nation has no desire to take one foot of land 
from any other nation by conquest — I am sure that this utterance 
has contributed something toward the cementing of our friendship. 
And may I refer to one other thing which has had an influence ? It 
is the fact that this Nation is now united to the Spanish-speaking 
Republics by treaties that provide for investigation of all disputes, 
leaving no cause for which we can go to war until after there has 
been a year's time for deliberation and for passion to subside. [Ap- 
plause.] This country has shown its good will by offering to all of 
the American Eepubiics, without respect to size, such a treaty, and 
these Eepubiics have responded in the spirit in which the offer was 
made. We may feel certain therefore that in the years to come 
there will be no hasty rushing into armed conflict; indeed, we have 
such faith in the power of reason, when controlled by friendship, that 
we are confident that a year's inquiry will enable us to find peaceful 
means of settling any disputes that may arise. 

The third expectation, suggested by the fact that we live side by 
side, is that of mutual helpfulness. Neighbors must not only know 
each other and be friends, but neighbors must help each other as 
opportunity offers. With acquaintance increasing and friendship 
established, I take it that the principal purpose of this meeting is to 
find ways in which we may be helpful to each other. 



PROCEEDINGS. 91 

The President has suggested one, and a very important one, 
namely, cooperation in the providing of means of communication. 
He has used his great influence to secure authority for this Nation 
to do its part, and I doubt not that his efforts will find a response in 
the nations here assembled and that in the course of time these na- 
tions, by cooperation, will establish lines of communication .which 
will not only be of advantage in ordinary times but will protect our 
commerce from interruption if at any future time the nations in 
other parts of the world find themselves unable to settle their dis- 
putes by the peaceful methods which we expect to employ. [Ap- 
plause.] 

There are other matters in which cooperation is possible, as for in- 
stance in finance and communication by wire and by mail, of which 
the Secretary of the Treasury will speak more at length. 

But I would not be pardoned if, with so many of our distinguished 
guests prepared to speak, and so inspiring an audience anxious to 
listen, I were to trespass further upon your time. Let me therefore, 
in conclusion, emphasize the thought that brought me before you, 
namely, that the State Department will, in every possible way, give 
support to the splendid efforts of the Secretary of the Treasury to 
crystallize acquaintance and friendship into practical helpfulness 
and, to the fullest extent, promote cooperation between the Eepublics 
whose representatives are assembled in conference. [Great ap- 
plause.] 

Secretary McAdoo. Response will now be made by the representa- 
tives of the Eepublics present. I shall call the roll of the Eepublics 
in their alphabetical order. I have the honor of introducing Dr. 
Samuel Hale Pearson, of the Argentine Republic. [Applause.] 

ADDRESS OF HON. SAMUEL HALE PEARSON, OF ARGENTINA. 

Mr. President, Ladies, and Gentlemen : 

On behalf of the delegation of the Argentine Eepublic to this Pan 
American Financial Conference, permit me first of all to express the 
profound gratitude of our delegation for the privilege afforded us 
of attending these sessions in which so many able and distinguished 
men of the Americas are taking part. 

I desire also, Mr. President, to bring to you the assurance from 
my Government and my fellow countrymen that the suggestion of 
holding this Conference was received in Argentina with unanimous 
expressions of deepest sympathy and interest, and I have full justi- 
fication in sa3 7 ing that earnest hope and confident belief are enter- 
tained there that this gathering will result in the realization of a 
long-cherished Pan American ideal. 



92 PAN AMERICAN FINANCIAL CONFERENCE. 

The regrettable events occurring in Europe during the past year, 
together with a combination of other unfortunate circumstances, have 
affected international trade, upon which rested the production of the 
wealth and the prosperity of the world and upon which we founded 
and based the development of our industries and nuances. 

The suggestion of the holding of this Financial Conference, made 
by the Government of the United States has come at a propitious 
moment, and its success already in this very hour is assured by the 
presence here of the representatives of so many American nations. 

Of the serious problems which we are about to consider in con- 
ference, permit me to say that the Argentine delegation cherishes 
the hope that in our gathering and in our deliberations together we 
shall find the way toward reestablishing an equilibrium in the 
economic life of America by Pan American methods and with Pan 
American resources. To accomplish this I feel certain that we 
shall not be obliged to create a new interdependence among the 
American Republics such as formerly existed with Europe, but that 
the immediate and permanent result will be the stimulation of inter - 
American reciprocity in the field of commerce and finance. [Great 
applause.] 

Secretary McAdoo: I now have the pleasure of calling on the 
representative of Bolivia, Dr. Ignacio Calderon. 

ADDRESS OF HON. IGNACIO CALDERON, OF BOLIVIA. 

Mr. President, Mr. Secretary, Gentlemen of the Conference, 
and Ladies and Gentlemen : 

In the corridors of this building are gathered the flags of all the 
Republics of America, and under the leadership of the Stars and 
Stripes they stand for peace and liberty. [Applause.] The United 
States is often called the melting pot of the nations. Let all of the 
Western Hemisphere become the melting pot where will be smelted 
every religious and race prejudice; the unjustifiable class distinc- 
tions and the traditions of one-man power, where will be crystallized 
the true fraternity of men and the glory of national sovereignty. 

By a strange coincidence of the most diverse events, the community 
of our interests has become very apparent. The Panama Canal makes 
us very near neighbors and opens the way to an increased exchange 
of trade relations. The war in Europe, by abruptly stopping the 
economic interchange with our countries, has more than any other 
event opened our eyes to the importance of strengthening our com- 
mercial ties. The able Secretary of the Treasury saw with clear per- 
ception that the time had come to bring about a Pan American com- 
mercial and financial understanding, and hence this congress. 



PROCEEDINGS. 93 

The friendship of the American Republics is not and must not 
be based on artificial ententes or alliances, but must have back of it 
the whole strength of the will of the peoples of this continent and 
the moral power of those great ideals so admirably and forcibly pro- 
pounded by the illustrious president of the United States in many 
public utterances. [Applause.] 

Mankind does not advance forward and onward to its highest 
destinies by hatred, selfishness, or violence. The living forces are 
right and justice, and the beautiful and disinterested aspirations of 
love. [Applause.] 

We are here now to discuss the commercial problems that pertain 
to us. We will enter on our discussions inspired by sentiments of 
mutual helpfulness and confidence. 

We all know that no business can thrive unless both parties to the 
transaction equally share the benefits. True economic principles ex- 
clude all selfish and deliberate plans to get the better of some one. 
The general welfare of the people is the strongest commercial and 
financial asset, and the greater that general welfare the larger is the 
field for successful undertakings. 

By following in our intercourse the broad and loyal spirit of friendly 
concern for the progress of our countries we will give substantial 
impetus to the cause of Pan American financial and commercial de- 
velopment, and at the same time stimulate our progress and friend- 
ship. 

Such are the wishes of the Bolivian delegation, which thanks most 
sincerely His Excellency the President for his hearty welcome. 
[Great applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Amaro 
Cavalcanti, of Brazil. 

ADDRESS OF HON. AMARO CAVALCANTI, OF BRAZIL. 

Mr. President and Ladies and Gentlemen : 

We have listened with great respect and satisfaction to the words 
of welcome and of encouragement which have been spoken by the 
President and the Secretary of State on the subject of the Pan 
American Financial Conference just now being inaugurated. 

As far as concerns Brazil, we consider such an important fact as 
one more proof of the same continued endeavor on the part of the 
United States to enlarge the most profitable relations between all 
the American Republics, as has been maintained and affirmed by its 
governments ever since the First American International Confer- 
ence, which also met at Washington about twenty-five years ago ; and 
its significance is at this moment very much increased because of two 



94 PAN AMERICAN FINANCIAL CONFERENCE. 

extraordinary events — the opening of the Panama Canal and the 
European war. 

It will be unnecessary to add that these world events in creating 
a new economic situation and new conditions in regard to foreign 
trade are urging the nations of this continent to adopt, as soon as 
possible, such adequate and provident measures as have been re- 
quired at no other time. For, in one case, all of them are interested 
in taking the profits and advantages to be expected from the new 
route now opened to commercial relations; in the other case we all 
are no less interested and determined to get rid, as much as possible, 
of the disastrous effects of that war, which constitutes a most 
flagrant crime against our Christian civilization. And while the 
most advanced nations of Europe, the greatest world powers them- 
selves, by disregarding the treaties and violating the laws and prin- 
ciples of humanity, are at present raging against one another in a 
furious war, which is destroying all the progress and beneficial 
results of civilization, it is fitting to emphasize the fact (and this is 
done with great satisfaction) that this great Republic is devoting 
her best efforts to the work of consolidating a permanent peace 
among all the peoples of this continent, doing so in a most effective 
way — that is, by striving for .the common development of their 
wealth and welfare. 

This imposes upon us the agreeable duty of congratulating your 
Government in the name of my country upon such a meritorious 
action. 

Further, as to the subject of the Conference itself, if we might be 
permitted to quote — which the time does not permit — some of the 
words of your lofty-minded statesman, James G. Blaine, the Secre- 
tary of State, when addressing the delegates to the First American 
International Conference in 1889, we should see that the policy of 
the United States toward its sister Republics in Central and South 
America has been, fortunately, characterized by such high sentiments 
as to inspire in all a justified confidence, and that the utterances 
themselves of its government in the past are almost identical with 
the eloquent words we have just heard from the President of the 
United States on the intention to establish bases, proper and suitable, 
to foster an increasing intercourse between all American countries. 

There will be, of course, some difficulty in ascertaining and adjust- 
ing such proper bases ; but difficulty does not mean impossibility. In 
this world of human affairs nothing is impossible, there being sin- 
cerity of purpose, respect for one another's rights, reciprocity of 
interest and advantages, and, above all, the good will of the interested 
parties. If all are willing to cooperate with such disposition of 
mind, success can not fail to be the natural outcome of their aims 
and transactions. Obviously no inherent difficulty can exist for 



PROCEEDINGS. 95 

North America to understand the trade conditions, resources, and 
methods of Central and South America, and vice versa. 

What remains to be done, and it is a great deal, is to strive to 
acquire a complete understanding of all facts and of practical means 
by which trade, commerce, industry, banking, and transportation may 
be carried on in the other parts of the continent in order that mutual 
benefits may be secured to producers and manufacturers, to importers 
and exporters, to customers and consumers in all the countries con- 
cerned. We should say more precisely what is necessary is to find 
out what products or manufactures each may profitably buy from 
North America as well as to find out what each can sell to North 
American customers and consumers. 

Thus by a careful examination of the facts and by a patient inter- 
change of views among all the representatives of the Republics 
present at this Conference, each familiar with the elements relating 
to the production, manufacture, internal and foreign trade, banking, 
and the like, of his own country — it is to be hoped that the Con- 
ference will be enabled to arrive at its very important object. 

In two things, however, we beg leave to anticipate: One is that 
now is a very opportune time for North America seriously to set 
about the studying and better understanding of Central and South 
America, and vice versa; the other is, that the more we study and 
understand the needs of one another the larger will be the reciprocal 
share of commercial returns and earnings for all the countries. 

To the Brazilian delegation's mind, all of us here assembled will 
certainly not be contented, at this time, with affirming again by 
resolutions or votes that the Republics we are representing are and 
sincerely desire to continue to be good friends one to another in all 
matters of international character that may arise. These affirma- 
tions, albeit of great value, do not suffice for the particular moment. 
We come for something more than this — that is to say, for the object 
of working together in such a manner and with such earnest intent 
that the transactions of this Conference may result in measures and 
resolutions capable of bringing about the economic improvement of 
the American Republics — measures and resolutions of practical effi- 
ciency, in accordance with the peculiar resources of each country. 

Let us, then, join hands and assist in the common development of 
all America. [Applause.] 

As has been very often observed, good intent begets like sentiments, 
and these in their turn beget sympathy and good will ; and no work 
of common interest is impossible of complete realization when it 
starts under the influence of such intentions. All difficulty ceases 
where good will and cooperation are really existing. 

Now in closing, Mr. President, we must apologize for having 
abused your generous attention, and permit us to express to you and 



96 PAN AMEBIC AN FINANCIAL CONFERENCE. 

to your Government our sincere gratitude for the gracious hospi- 
tality with which Brazil has been received. [Great applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Luis 
Izquierdo, of Chile. 

ADDRESS OF HON. LTJIS IZQUIERDO, OF CHILE. 

Mr. President, Ladies, and Gentlemen : 

The delegates from Chile have heard with great attention the 
noble words of the addresses delivered by you, Mr. President, and 
Mr. Secretary Bryan, and I feel it my duty to begin by expressing, 
as the gentlemen who preceded me have done, the cordial apprecia- 
tion of the Government of Chile for the invitation extended to them 
in your name and in the name of the United States. 

Since the days of our political independence Chile and all the new 
Latin- American Republics have opened their doors wide to the com- 
merce and friendship of the whole civilized world. From the begin- 
ning our trading and financial relations with the old countries of 
Europe, from which we both of North America and South America 
are proud to descend, acquired great importance; while the United 
States, engaged in developing its own resources, has only recently 
been able to show an interest in coming into close touch with our 
countries. 

It is only a quarter of a century ago, Mr. President, since your 
Government invited here the first of the International Pan Ameri- 
can Congresses, which have done a great deal, in principle at least, to 
foster relations among the nations of the whole hemisphere and to 
establish among them that common confidence without which no in- 
ternational friendship can exist. [Applause.] 

In recent years we have had the honor of welcoming in our coun- 
tries such eminent personalities of the United States as former Presi- 
dent Eoosevelt, Secretary of State Bryan, the Honorable Elihu Eoot, 
and the Honorable Robert Bacon; we have received delegations from 
the chambers of commerce of Boston and other centers of this coun- 
try, and we have also been favored by the visit of some of the most 
prominent members of your universities, guided by that distinguished 
Pan Americanist, who has accepted the position of secretary general 
to this Conference, Dr. Rowe. [Applause.] 

We begin to be better known to the United States, and the im- 
mense possibilities the southern continent offers to this great com- 
munity of the north are now being realized. It is a fact that in a 
little over twenty years the trade of the United States with Latin 
America has increased from $250,000,000 in 1890 — the year of the 
first Pan American Congress — to more than $800,000,000, and it 
continues to increase. 



PROCEEDINGS. 97 

Two facts of the most unusual meaning, which have been referred 
to by the Bolivian minister and by the delegate from Brazil, help now 
to expand our commercial relations with the United States — the 
opening of the Panama Canal and the European war. The opening 
of the Panama Canal could not but have enormous influence on the 
established routes of trade. We can say without hyperbole that 
the Panama Canal, as the Suez Canal did, has really modified the 
geography of the world. When the Suez Canal was opened, the 
Mediterranean trade acquired new life, and old declining ports, such 
as Marseilles, Genoa, and Naples, could trade directly with the Far 
East without the intervention of the maritime countries which for- 
merly monopolized that trade. 

The opening of the Panama Canal signifies much for us, inhabi- 
tants of the southern part of the hemisphere. The principal Chilean 
port, Valparaiso, connected with the Atlantic by a transandine rail- 
way, lies in direct line at 4,660 miles from New York. Our north- 
ern port of Arica, connected with Bolivia by another transandine 
railway, lies at less than 4,000 miles from New York. 

On the other hand, the war in Europe is hindering and in some 
cases is paralyzing and stopping the commercial intercourse of Latin 
America with its European markets, and this not only on account 
of the troubles in the production and industrial life in Europe, but 
principally on account of the sudden lack of shipping, which was 
universally the first consequence of the war. 

Here is a field open to the activities of business men in the United 
States and to the production of its manufacturing industry, and I 
may add that this field would have been opened by the sole powerful 
action of economical laws, even if the war were not, as it is, a most 
terrible fact. When saying this I have not the least idea of impairing 
our business links with Europe. For years and years we have had 
the best friendly relations with Europe, and received from it finan- 
cial support, which has largely and efficiently contributed to our own 
progress. 

Now, Mr. President, before I finish, allow me to say that the de- 
velopment of the different nations of Latin America and the exploita- 
tion of the unlimited resources concealed in them are problems still 
pending, problems of the near future. Time is ripe for cooperation, 
and it seems rather strange that this word "cooperation" should 
sound as a novelty in the relations of Americans with Americans. 
Let us hope, ladies and gentlemen, this cooperation will be efficient, 
will be real and practical. Let us hope that from this conference 
something may come which will promote our prosperity at home and 
extend the trade between the United States and Latin America with 
reciprocal benefit ; let us hope that our deliberation will not diminish 

98257 °— 15- 7 



98 PAN AMEKICAN FINANCIAL CONFERENCE. 

and will, on the contrary, add new strength, in this hour of tre- 
mendous commotion for mankind, to the great moral force of a united 
America. [Great applause.] 

Secretary McAdoo. Ladies and gentlemen, I have the honor of in- 
troducing Dr. Santiago Perez Triana, of Colombia. 

ADDRESS OF HON. SANTIAGO PEREZ TRIANA, OF COLOMBIA. 

Mr. President, Ladies, and Gentlemen : 

The American peoples that have constituted themselves into free 
and independent nations are gathered here by their legitimate repre- 
sentatives. I use the patronymic "American " in the full radiance of 
its continental integrity, covering North, Central, and South. 

These peoples have met here, or are meeting, in an errand of peace 
that, in ordinary circumstances, would be part of the day's work. 
But the circumstances of history in the assembled background make 
this work of peace appear like a dream of light, which is both a 
revelation of the past, as it is, and is clothed in the hues of prophecy 
for the future. [Applause.] 

This meeting coincides with a lurid moment of history, when, alas, 
by the inscrutable dispensation of Providence, the greatest nations 
in the world across the ocean are bent on errands that are not of 
peace. All their thoughts, all passions, all endeavors, tend to 
slaughter and destruction. 

And against that background the continent of America calmly and 
serenely proceeds in its work of peace. 

It is not for us to view the facts in a spirit of censorious arrogance. 
It is for us to thank Providence deeply and reverently for the merci- 
ful dispensation to realize that this could not have been accomplished 
by fortuitous circumstances alone. It is the result of the work of the 
founders of liberty and emancipation in America. The seed that they 
planted has grown throughout the continent, and we, who have re- 
ceived that glorious inheritance, at this terrible moment of histoiy 
have as our first and foremost duty to prove that we are deserving of 
the inheritance that they left to us and that we will carry it on. 
[Applause.] 

Law and order, and the concepts, and the conventions for which 
humanity has labored since the beginning of time are destroyed in 
an hour in the countries across the ocean. But in the meantime law 
and order have found their refuge in America. We are the trustees 
of the liberties of the world and the guardians of the future. 

Let us do our duty. Not only the United States, as was once said 
by lips hallowed by martyrdom, were conceived in liberty and dedi- 
cated to freedom; that is the glorious heritage of all the nations of 
America. Whatever tends to unite those nations in common bonds 
of friendship, of common interest or sympathy; whatever tends to 



PROCEEDINGS. 99 

strengthen their solidarity is a work not only for the peace of 
America but for the peace of the world. 

Such is this Conference. May God grant that it succeed ! [Great 
applause.] 

Secretary McAdoo. I regret to say that Dr. Guardia is ill. The 
Honorable John M. Keith will respond for him in behalf of the 
Republic of Costa Rica. I have the honor of introducing Mr. Keith. 

ADDRESS OF HON". JOHN M. KEITH, OF COSTA RICA. 

Mr. President, Ladies, and Gentlemen : 

Replying to the cordial expressions of welcome extended by Your 
Excellency, in the name of the delegation of Costa Rica I have to 
express the hope that the high practical aims of this Conference 
will be fully realized in cementing a new bond of union and a better 
mutual understanding between the Americas. 

We believe that a new economic dawn is inaugurated for the wel- 
fare of Latin America, in which we desire to participate. As an evi- 
dence of this desire the Government of Costa Rica has honored me, 
an American-born citizen, as one of its delegates. 

Over thirty years' residence in Latin America qualifies me ' to 
express the conviction that a firm faith in its future progress and 
development is justified by what it has accomplished in the past. 

Speaking with special reference to the Tropical Zone, contained 
between the tenth and twelfth degrees of latitude north and south of 
the equator, which embraces so large a portion of South and Central 
America, no part of the hemisphere can show a civilization as high 
as, or even comparable with, that attained by the genius of the Latin 
race — a civilization realized in the face of almost insurmountable 
physical, climatic, and ethnological conditions. Four centuries of 
constructive social and political endeavor have prepared Latin 
America to reap the benefit of the economic development which its 
geographical position and natural resources indicate. 

The delegation of Costa Rica expresses its deep appreciation of 
the hospitalities extended by your Government, and again voices 
its concurrence with the aims and purposes of this Conference. 
[Great applause.] 

Secretary McAdoo. I have the honor to present to the Conference 
Dr. Pablo Desvernine y Goldos, of Cuba. 

ADDRESS OF HON. PABLO DESVERNINE Y GALDOS, OF CUBA. 

Mr. President, Ladies, and Gentlemen : 

I am perhaps the only one who has been taken somewhat unawares, 
but my understanding is that the only thing that we were called upon 



100 PAN AMERICAN FINANCIAL CONFERENCE. 

to do was to respond, and the only way to respond was to give thanks 
to the President of the United States for the kind words with which 
he has received us. I therefore have to acknowledge here my com- 
plete unpreparedness to say anything else, but to indorse and approve, 
as Mr. Bryan says, the noble and generous words pronounced by the 
President of the United States. [Applause.] 

This is more than the commencement of the economic part of the 
Conference. It is, I conceive, a sort of eucharistic feast, in which we 
come to offer you our thanks for what you have done for us, and that 
vouches for the success of the Conference also, because by persistently 
thinking along one line action often results therefrom. Action once 
begun, success in such undertakings as this is almost invariably as- 
sured; and this success means closer friendly and commercial rela- 
tions between the countries of the western world. . 

I wish to add, Mr. President, that I have just been told that the 
name of this room is the " Hall of the Americas." This plural form 
is emblematic. This hall's solid marble symbolizes the permanence 
of the friendship of the American nations among themselves. 

Before finishing, gentlemen, I wish to say, renewing the recollection 
of something I had the pleasure to express a few days ago, that it is 
certainly a great contrast that while our countries of America are 
trying to settle their problems in such a conference as this and are 
trying by words of mutual friendship and good will to prepare them- 
selves for the present and future, in other parts of the world these 
same questions have led nations into a most bloody war. The reason 
may be that all of us recognize that in the entire continent of America 
there is one purpose of political policy, so to speak, and that that 
unity of purpose is the solid guaranty for our united political action 
in the direction of peaceful commercial intercourse. 

In regard to the intentions and motives that animate all of us here 
it is certain that they are disinterested, since our only desire is to 
agree on closer friendly relations among all the nations of America, 
and in this respect let me close with the following remark : 

Gentlemen of Central and South America and representatives from 
the United States, if you wish to know what the United States means 
to America, if you want to know what their political program is in 
regard to the American nations, please look at the example they have 
set there in the midst of the Gulf, at the Pearl of the Antilles, and see 
what they have done for Cuba and what they have accomplished 
there [applause], and that pearl in its beautiful setting will cer- 
tainly be a guaranty for all of us that only friendship and affection 
can bind the United States to the other nations of America. [Pro- 
longed applause.] 



PROCEEDINGS. 101 

Secretary McAdoo. I have the honor to present to the Conference 
Dr. Francisco J. Peynado, of the Dominican Eepublic. 

ADDRESS OF HON. FRANCISCO J. PEYNADO, OF THE DOMINICAN 

REPUBLIC. 

Mr. President, Ladies, and Gentlemen : 

Once more those laws which control the material, moral, and intel- 
lectual approximation of social groups pursuing common ideals have 
worked their spell, and this in spite of differences which at times the 
prejudice of human nature brings about. 

The peoples of North, Central, and South America, notwithstand- 
ing many errors committed in the past, and notwithstanding the 
prejudices which have brought those mistakes into being, have now 
reached a frank and honest understanding, impelled by a great 
movement of reciprocal attraction ; and, in virtue of those laws, these 
peoples at no distant date will necessarily form themselves into a 
family of nations whose democratic institutions, whose love of and 
honor for work, and whose honest obedience to the law of coopera- 
tion, strengthened by a common ideal of independence and sover- 
eignty, will offer the finest tribute to civilization which the mind 
and the heart of man can offer. 

To-day the young nations of this very rich continent find them- 
selves face to face with a war never before equalled; but the ideals 
of justice cover them with a shield of peace. Beneath this protec- 
tion they are entering with full vigor into a new era of law and 
order; and, throbbing with enthusiasm, they have accepted the 
praiseworthy initiative of the Government of the United States to 
unite in a congress to settle by common action certain transcendental 
problems which for some time have faced us, but which have been 
turned by the European war into problems demanding definite and 
immediate solution. 

It is natural, therefore, that the Dominican Government, inter- 
preting clearly the lofty spirit which actuates this movement, would 
not hesitate to send its representatives to contribute, to the fullest 
limits of their power, to the success of the labors of this conference ; 
and this they solemnly promise to do. 

The Dominican delegation felicitates itself on this account and 
offers on behalf of its Government the heartiest congratulations to 
the Government of the United States, and likewise to you, Mr. Presi- 
dent, and to your brilliant collaborators. [Great applause.] 



102 PAN AMERICAN FINANCIAL CONFERENCE. 

Secretary McAdoo. I have the honor to present to you Dr. Juan 
Cueva Garcia, of the Republic of Ecuador. 

ADDRESS OF HON. JUAN CUEVA GARCIA, OP ECUADOR. 

Mr. President, Ladies, and Gentlemen : 

From the majestic white crowns of our double avenue of volcanoes; 
from the greatest plateau of the world, where at an altitude of 6,000 
to 9,000 feet labor the great mass of our population ; from the ardent 
coast, glorious with flowers, fruits, cocoa, coffee, rubber, ivory, and 
nuts, and straw for Panama hats; from that coast, exceptionally 
endowed with the most marvelous system of rivers, still unknown to 
this country, I am bringing, sir, a message of sincere friendship to 
this sister Republic and a personal one of respect and admiration for 
Your Excellency. [Applause.] 

" While the most horrible war devastates the flourishing nations 
of the Old World, your Government has called this vast continent, 
new in the life of civilization, and rising up with great forces and 
ideals, to the action of peace, work, commerce, and fraternity. 
And the whole continent, en masse, has answered your call, send- 
ing us north as a symbol of friendship, as the earnest expression 
of our sincere desire to enjoy closer relations among the commu- 
nities forming the American family. Born in this country of yours 
3,000 miles from Europe, with a great and constant immigration, 
with an endless rolling land back of you, with every facility to 
build your roads, and for general development, your fellow coun- 
trymen will never realize how difficult every step of our civiliza- 
tion has been for us. And it is under these circumstances, without 
any of the helps that you have had on the other side of the Panama 
Canal, with so many obstacles, geographical, topographical, and cli- 
matical, in the land where creation is still in full action, in astounding 
and incessant production of life and death ; it is under these circum- 
stances that we, the inhabitants of Ecuador (Ecuador means " the 
Equator ") under the straight rays of the sun, have become the lead- 
ers of the cocoa trade of the world, have built our world-wide indus- 
try of hats, improperly named Panama hats. 

When history does justice to our efforts it will tell of our faith 
and strength in the battle for civilization, and whether or not we 
acted well under the circumstances with which we had to contend. 
In the meanwhile here we are, sir, ready to further any effort that 
may mean a sincere understanding among all, and for the benefit of 
all. Let us build the harmony of this continent in justice, in honesty 
of mind and action. Let these virtues by means of united effort restore 
the mutual confidence so much needed in these sister Republics, in 



PROCEEDINGS. 103 

order that we may employ our combined effort in the common welfare 
of the continent. 

In the name of Ecuador I salute the people of the United States, 
and in the name of my Government I wish Your Excellency long 
years of happiness amidst your fellow countrymen, surrounded by the 
love and respect and admiration that you so greatly deserve. [Great 
applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Victor 
Sanchez Ocana, of Guatemala. 

ADDRESS OF HON. VICTOR SANCHEZ OCANA, OF GUATEMALA. 

Mr. President, Ladies, and Gentlemen : 

Guatemala hastened to accept the invitation which Your Excel- 
lency's Government so kindly extended it to be represented at this 
Conference not only on account of the cordial friendship it has ever 
cultivated with this prosperous Republic — which moves us to accept 
forthwith its every initiative on behalf of the brotherhood and 
progress of the other peoples of this continent — but because the sub- 
ject matter of the Conference is such as awakens the sympathy and 
interest of Guatemala by reason of its vital importance and of the 
benefits to be reaped by the country I represent in the full develop- 
ment of its resources through the aid and cooperation of her sister 
Republics of America in a labor of commercial approximation and 
common financial benefits. 

The delegation of Guatemala has accordingly come to place its 
modest contribution at the service of this Conference, which holds out 
so much hope for the interests of the continent. 

The Guatemalan delegation, in presenting its respectful greetings 
to the illustrious first citizen of this great American Nation and in 
expressing once again its sentiments of gratitude for the welcome it 
has received, voices the hope that the fullest measure of success shall 
attend the efforts of the Conference, at which are gathered so many 
distinguished men of the three Americas. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Leopoldo 
Cordova, of Honduras. 

ADDRESS OF HON. LEOPOLDO CORDOVA, OF HONDURAS. 

Mr. President, Ladies, and Gentlemen : 

The delegation of Honduras takes great pleasure in acknowledg- 
ing the welcome with which His Excellency the President of this 
Republic has honored it, and hopes that this Conference, actuated by 



104 PAN AMERICAN FINANCIAL CONFERENCE. 

a spirit essentially American, may be fruitful in results for the 
financial interests of our small nation. 

Honduras, Mr. President, has been the victim of frequent political 
upheavals, and she needs the help of a powerful sister nation such as 
the United States in order that she may enter fully into the path of 
order which is the foundation of all progress. 

On behalf of the Government and of the people of Honduras we 
renew our warmest thanks to the Government of the United States 
for the many courtesies we have received ever since our arrival to 
this country. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Pedro 
Rafael Cuadra, of Nicaragua. 

ADDRESS OF HON. PEDRO RAFAEL CUADRA, OF NICARAGUA. 

Mr. President, Ladies, and Gentlemen : 

It is an honor for me, Mr. President, to greet Your Excellency on 
such an occasion as this, in the name of the Government and people 
of Nicaragua. The ideals sought in this gathering of the leading 
financiers of America are nearly the same as those my Government has 
been endeavoring for some time to realize. We have come here, be- 
fore now, seeking closer economic relations between our two coun- 
tries, and I am most sincere in stating that we have great pride in 
following the leadership of this great people, whose ideals of service 
to humanity we so much admire. And for this reason my country 
confidently expects that our desired ends will be attained through 
the present Pan American Financial Conference. 

Permit me, in conclusion, to express our thankfulness for your 
kind invitation to come here and look for the best means of fulfilling 
these high ideals. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Eamon F. 
Acevedo, of Panama. 

ADDRESS OF HON. RAMON F. ACEVEDO, OF PANAMA. 

Mr. President, Ladies, and Gentlemen : 

The delegation of Panama to the Pan American Financial Confer- 
ence highly appreciates the expressions of welcome which it has just 
heard from the lips of the First Magistrate of this great country, 
and in the name of the Government and people of Panama it wishes 
to render the most sincere thanks for the invitation to take part in 
this Conference, which will be memorable on account of the historical 
epoch in which it takes place and for the beneficial results which 
undoubtedly will be derived from it. 



PROCEEDINGS. 105 

The political and economic interests of the Republic of Panama 
are intimately and perpetually bound to those of the United States, 
and the delegation of Panama has the hope that this great Conference 
will produce between the two countries still closer relations, founded 
not only on those common interests but also on the spirit of full and 
generous justice of the American Nation, and which are to prevail 
between all the Republics on this continent, called to be the center 
of a new and flourishing civilization. 

You have laid the corner stone of a building that promises to be 
the magnificent temple of harmony and prosperity; let us all co- 
operate with the best of our energies to its construction and com- 
pletion in the hope that it may last for years and years. [Loud 
applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Hec- 
tor Velazquez, of Paraguay. 

ADDRESS OF HOK HECTOR VELAZQUEZ, OF PARAGUAY. 

Mr. President, Ladies, and Gentlemen: 

It is the occasion of sincere personal gratification, this distin- 
guished honor of being designated to represent my country before 
this illustrious and impressive assembly, in which the most experi- 
enced thinkers and experts of America in the financial and economic 
sciences have been called together with the momentous purpose of 
establishing a solid foundation for our commercial life, for blazing 
the trails that are to lead us to the realization of our constant and 
heartfelt longings. 

A great and powerful Nation — rich in material progress as in the 
noble sentiments treasured in the hearts of its people — has invited its 
sister Republics of this continent to discuss problems of the highest 
importance, interesting to all alike, whose solution will be vitally 
influential for our common progress, for international confraternity, 
for the harmonizing of aspirations and ideals, the only permanent 
foundation for true Pan Americanism, which we so earnestly seek 
and which we are beginning to realize. 

This act of the Government of the United States is a step in ad- 
vance, brilliant and vigorous, destined to give fresh impetus to the 
endeavor, persevering and each time more earnest, to dissipate 
jealousies and doubts; to waft away the mists that in the sky of this 
continent might obscure or retard the consummation pictured by 
statesmen of great and noble heart of all ages for our beloved Amer- 
ica ; to bring about loyal collaboration, with a clear and frank under- 
standing, for the progress and well-being of all; and especially for 
the attainment morally of the highest ideals that humanity ever pur- 



106 PAN AMERICAN FINANCIAL CONFERENCE. 

sues and pledges itself to crystallize into fundamental principles 
that in practical life will serve as a guide to its boundless culture 
and improvement. 

The work of Blaine, of Koot, of Bryan, of all the other spokes- 
men of the administrations and of the people of this Republic, has 
ever received harmonious acknowledgment among her sister Latin 
American Republics, and the personnel of this Congress, the happiest 
and most opportune among like inspirations, is proof anew of the 
cordial and enthusiastic manner in which they have responded once 
more to the courteous call. 

The Government of Paraguay contemplates with genuine satisfac- 
tion the celebration of this assembly, convinced that its deliberations 
will shed a clear light on the path that in the economic field the 
Republics of America shall follow, particularly those which, as my 
country, have scarcely begun the development of their natural 
resources. 

Situated in fact in the very heart of South America, within the 
confines of the Temperate Zone and on the border of the Torrid 
Zone ; with a mild climate, of universal renown for its incomparable 
salubrity; with soil of the greatest fertility, traversed by innumer- 
able rivers and other streams that constitute her natural irrigation ; 
adapted to the cultivation of almost every tropical and subtropical 
product, and for the breeding and fattening of numerous herds 
of cattle; with her primeval forests, in great part yet virgin, in 
which are found the rarest woods for the builder and for the cabinet- 
maker; with the mineral wealth of her mountains and hills hardly 
touched ; with the enchanting perspectives of her lakes and prairies, 
attracting lovers of beauty and health — Paraguay is yet awaiting 
the intelligence, the capital, the energy, that are to convert the nat- 
ural wealth with which she is endowed into elements of life and cul- 
ture for a numerous population and for humanity. 

Honored in expressing in the name of my Government its sincere 
hopes for the success of the deliberations of this Congress, so aus- 
piciously initiated, permit me to join with them my personal wishes 
and those of my associate delegate, the consul general, Mr. William 
Wallace White. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Isaac 
Alzamora, of Peru. 

ADDRESS OF HON. ISAAC ALZAMORA, OF PERU. 

Your Excellency and Ladies and Gentlemen : 

The delegation of Peru highly appreciates the kind welcome ex- 
tended by the First Magistrate of this great Kepublic, and is happy 
to be able to avail itself of this opportunity to convey to the Govern- 



PROCEEDINGS. 107 

ment and the people of the United States the most friendly greetings 
from the Government and people of Peru. 

The Peruvian delegation will at all times give its earnest attention 
and consideration to the ideas so felicitously expressed by Your 
Excellency respecting the object of this Conference, and will feel 
much honored in cooperating to the practical realization thereof, 
as far as is compatible with the present conditions in Peru. 

The wishes of Your Excellency for the welfare of the Republics 
represented in this conference are sincerely echoed, as far as my 
country is concerned, by every Peruvian citizen, who now, as in the 
past, desires only the continued and uninterrupted progress and 
prosperity of this Nation, as well as the personal happiness of its 
honored President. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Alfonso 
Quinonez M., of Salvador. 

ADDRESS OF HON. ALFONSO QUINONEZ M., OF SALVADOR. 

Your Excellency, Ladies, and Gentlemen : 

The delegation of Salvador has the honor to offer its most respect- 
ful greeting to His Excellency the President of the United States, 
to His Excellency the Secretary of the Treasury, and to the honorable 
delegates of the American Republics attending this Financial Con- 
ference. 

This delegation gladly acknowledges its gratitude to the high 
public officials and to the commercial organizations of the United 
States for the many attentions with which it has been favored since 
its arrival. 

The Government of Salvador looks upon the invitation of the 
American Government to this Conference as a signal honor, and it 
hopes that its results may be converted into practical benefits for 
the commercial relations of the two countries. 

The remarks of His Excellency the President of the United States 
and of the Honorable Secretary of State, and the ceremony which 
we are attending to-day are a sure guaranty of the success and bene- 
ficial results of this Conference for the countries of Central and 
South America. 

The Republic of Salvador, although small territorially, is thickly 
populated, and has progressive industrial and commercial tendencies. 
The Government and people of Salvador, whose representatives we 
have the honor to be, accordingly express the most ardent desires for 
the ever-increasing growth of the commercial relations between the 
United States and the other American Republics, and warmly ap- 



108 PAN AMEKICAN FINANCIAL CONFERENCE. 

plaud this most opportune and happy initiative of the Government 
of the United States. [Loud applause.] 

Secretary McAdoo. I have the honor of introducing Dr. Pedro 
Cosio, of Uruguay. 

ADDRESS OP HON. PEDRO COSIO, OF URUGUAY. 

Mr. President, Ladies, and Gentlemen : 

Uruguay has accepted the invitation of the United States to take 
part in the Financial Conference in Washington with a full under- 
standing of the far-reaching importance which a solution of the 
problems of exchange caused by the European war will bring about 
for the American Continent. 

But first I wish to state, Mr. President, that Uruguay has re- 
sponded to this invitation principally on account of the feeling of 
understanding and of admiration which the American people and 
their worthy representatives in the government deserve at the hands 
of the people of my country. 

Economic interests are, owing to their very nature, removed from 
the mere friendships between one country and another, since the 
economic life is regulated by inevitable laws of social dynamics. 
However, it is a fact evidenced by every epoch of history that har- 
mony of interest between countries is the most solid basis for good 
relations, in the same manner that commercial rivalry is the most 
efficient dissolving force which hinders the natural human tendency 
toward the brotherhood of man. 

The purpose of the Government of the United States in calling this 
Financial Congress can not be considered as other than inspired by 
high and generous motives of foresight, tending to consolidate and 
to guarantee effectually for the future the excellent friendly relations 
which to-day unite the countries of the two Americas. 

The leading men of the United States have been characterized in 
the past, and particularly in these latter days, for their tendencies 
against the barbaric solution by warfare. There could be nothing 
more logical, therefore, in this generous creed than to prepare an at- 
mosphere favorable to the permanence of peace between the nations 
of America, which should use their energies in the constructive work 
of extending their own greatness. 

If the Financial Conference increases economic ties and harmonizes 
commercial interests between the countries of America, as it surely 
will, your work, Mr. President, will project itself indefinitely into 
the future, to the moral and material benefit of the American peoples. 
[Loud applause.] 



PROCEEDINGS. 109 

Secretary McAdoo. I have the honor of introducing Dr. Pedro 
Rafael Rincones, of the Republic of Venezuela. 

ADDRESS OF HON. PEDRO RAFAEL RINCONES, OF VENEZUELA. 

Mr. President, Ladies, and Gentlemen : 

By a benevolent act of my Government I have had the honor to be 
appointed its representative at this Pan American Financial Confer- 
ence, which has just been inaugurated in the presence of the distin- 
guished gathering here assembled. 

It is the earnest hope of the Venezuelan delegation that the out- 
come of the proceedings of this important meeting shall fulfill the 
expectations of us all in bringing about a still closer mutual under- 
standing in our commercial relations with far-reaching effects for 
the American States so worthily represented at this Conference. 

We are deeply indebted for the kindly welcome and courtesies 
extended to us by the entertainment committee appointed by the 
honorable the Secretary of the Treasury of the United States and 
presided over by Mr. Dudley Field Malone. He is a fine type of the 
true American gentleman, and his distinguished wife typifies the 
grace and sweetness which has made the American woman famous. 

We appreciate most highly the amiable words of welcome uttered 
by the First Magistrate of this great Nation, and in behalf of my 
Government as well as in my own name it is gratifying for me to 
express the best wishes for the continued prosperity of the United 
States of America and for the welfare of its President, who seems 
to be inspired by the noble characteristics of one of his great prede- 
cessors which made him a man "with malice towards none, with 
charity for all." [Loud applause.] 

Secretary McAdoo. The Conference will now take a recess until 
2.30 o'clock p. m. 

I wish to announce that the President of the United States will 
receive all of the guests, ladies and gentlemen, who are here, at the 
White House during the recess to-day. 

(At this point a recess was taken.) 



SECOND SESSION 



MONDAY AFTERNOON, MAY 24, 1915 



111 



SECOND SESSION, MONDAY AFTERNOON, MAY 24. 



The conference was called to order at 2.30 o'clock p. m. by the 
chairman. 

ADDRESS OF THE HON. WILLIAM G. McADOO, SECRETARY OF THE 
TREASURY OF THE UNITED STATES. 

Fellow Americans: 

Permit me to express the intense satisfaction and gratification of 
the Government and people of the United States at the cordial and 
hearty response of the Governments of South and Central America 
to the call of the United States for this Financial Conference. The 
people of the United States are profoundly honored by the presence 
here to-day of so many distinguished men from South and Central 
America — men whose character and achievements have put them in 
the front rank of citizenship in their respective countries. Nothing 
could more eloquently testify to the importance of this notable gath- 
ering than the distinction with which it has been impressed by the 
character and quality of our foreign guests, and it may, with equal 
truth, be said that the character of the able and distinguished men of 
the United States who are participating in these deliberations is' 
evidence of the great importance with which this Conference is 
regarded by the Government and people of the United States. [Ap- 
plause.] 

We extend to you cordial greetings and hearty welcome, and 
earnestly hope that your visit to the United States may be fruitful 
in practical results, advantageous to your countries, and replete with 
happiness for yourselves. 

International conferences of various kinds in different parts of the 
world have been held in times past, and this is not the first conference 
between the Republics of the American Continent. The Pan Amer- 
ican Union is the result of one of these conferences, and is a tribute 
to the vision and statesmanship of the great leaders of the Western 
Hemisphere. But never before has there been assembled an inter- 
national conference of such peculiar significance as this one. We 
meet at a time when more than half the world, in population and 
territorial area, is engaged in a colossal conflict, destructive of life 

113 

9S257 — 15 8 



114 PAN AMERICAN FINANCIAL CONFERENCE 

and property upon such a gigantic scale as to influence profoundly 
the economic status of all the nations of the earth. The countries of 
the Western Hemisphere have been seriously affected, and are 
obliged to consider what measures shall be taken to protect their 
own interests from the consequences of the mighty European strug- 
gle. We of the United States have already tasted the bitter experi- 
ence of disrupted credits, paralyzed shipping, and disorganized com- 
merce. Happily we have largely overcome them now, but our experi- 
ence enables us to know and appreciate to the full the difficulties 
which you, our neighbors, have been forced to meet, perhaps in a 
larger degree than ourselves, from these same causes. Eealizing these 
conditions, it seems both wise and necessary that we should come 
together for the purpose of considering the problems that confront 
us and concerting the means by which they may be successfully met 
and conquered. 

It is not from selfish motive or sordid desire for material gain 
that this conference draws its inspiration. It has a deeper and a 
finer meaning. We meet for the purpose of considering how and in 
what manner the great Eepublics of the Western Hemisphere, repre- 
senting as they do common ideals of liberty, justice, and self-govern- 
ment, and dedicated as they are to the highest and best interests of 
humanity, may, through common action and interest, not only con- 
serve their material welfare but become a more homogeneous and 
powerful moral force for the preservation of peace and the good of 
humanity. [Applause.] 

A wholesome material basis, which implies the prosperity and hap- 
piness of the people of a nation, is essential to the perfection and 
realization of those high ideals and moral principles which pro- 
foundly influence the course and progress of humanity. Through a 
better understanding of the economic needs of our respective coun- 
tries let us hope that we may be able to establish a common basis of 
material prosperity which shall make increasingly apparent the 
essential community of interest of the nations of the Western Hemi- 
sphere. We owe it at least to ourselves to initiate those measures and 
policies which will make the nations of the western world self- 
contained and independent of the disastrous consequences of future 
collisions between the nations of the Eastern Hemisphere and capable 
of helping the suffering people of Europe in the time of their dis- 
tress and misfortune. So long as we are in large part financially 
dependent upon the nations of Europe for our internal development 
and economic stability, so long are we exposed to the hazards of their 
internal strife and external wars. This seems to be the opportune 
time for the development of the spirit, at least, of continental 
solidarity. 



PROCEEDINGS. 115 

The nations of the Western Hemisphere can not make a greater 
contribution to the cause of civilization than to effect that kind of 
continental solidarity which, resting upon wholesome material inter- 
ests, political accord, common ideals, and mutual helpfulness, will 
give them a commanding influence for the peace of the world and the 
service of mankind. [Applause.] 

We are all anxious to achieve practical results. We do not wish 
this conference to culminate in mere debate. We of the United 
States earnestly desire that you shall give to us the most complete 
and authentic information concerning the financial and economic 
needs of your respective countries and about every problem which 
you think we may consider to your and- our advantage. We realize 
that each country has its own distinctive problems; that the prob- 
lems of one country probably do not relate to those of its neighbors; 
that such problems may concern governmental or public financing, 
tariff laws as they affect the United States trade, commercial credits 
and direct exchange with the United States, ocean transportation, 
and various other things. Manifestly the specific problems of each 
country can not be debated with advantage or benefit in the general 
sessions of the conference. In order, therefore, to give each country 
the opportunity of discussing its particular problems with the utmost 
frankness and freedom we have adopted the plan of dividing the 
delegates of the United States into eighteen committees. One of these 
committees will be assigned to each of the countries represented in 
the conference. This will bring about a series of group conferences, 
where the problems of each country may be discussed with a body 
of representative bankers and business men of the United States, 
who will do their utmost to cooperate in the most effective possible 
manner with the delegates of the several foreign countries in arriving 
at tangible and practical results. The men who represent the United 
States have been chosen because they are among our strongest bank- 
ers and financiers and among the greatest of our manufacturers and 
merchants. They will cooperate with you in the most enthusiastic 
and sympathetic spirit. 

As a result of these group conferences it is hoped that before the 
close of the general conference the delegates from each foreign 
country will submit a written report of such of the proceedings of 
the group conferences as they may desire to have incorporated 
in the proceedings of the general conference. These proceedings 
will be published in English and Spanish, and will be given general 
distribution. If the foreign delegates should be unable to submit 
such reports before the close of the general sessions, the publication 
of the proceedings of the conference will be delayed for a reasonable 
period in order that ample time may be allowed the foreign delegates 
to forward such reports as they may care to submit. Among the 



116 PAN AMERICAN FINANCIAL CONFERENCE. 

subjects which I would respectfully suggest that the group con- 
ferences consider are the following: 

1. Public Finance. 

(a) Public revenues and expenditures as affected by recent events 

in Europe. 

(b) Measures adopted to meet the situation. 

(c) Proposed. remedies. 

(d) Possibilities of international cooperation. 

2. The Monetary Situation. , 

(a) Conditions prior to the outbreak of the European war. 

(b) Effects of the war. 

(c) Possibilities of international cooperation. 

(d) Outlook for uniform monetary standards. 

3. The Present Banking Situation. 

(a) Conditions existing prior and subsequent to the outbreak of 

the European war. 

(b) The establishment of branch banks and of direct exchange. 

(c) Possibilities of further international cooperation. 

4. The Financing or Public Improvements. 

(a) The underwriting of national loans. 

(b) The underwriting of provincial or State loans. 

(c) The underwriting of municipal loans. 

(d) The relation of public credit to a well- organized system of 

taxation and a balanced budget. 

5. The Financing of Private Enterprises. 

(a) The present needs of public service companies, such as rail- 

road, street railway, electric light, gas, and power com- 
panies. 

(b) The needs of merchants and manufacturers. 

(c) The financing of seasonable crops. 

(d) The consideration of plans to secure a more satisfactory 

status for collateral as security for commodity loans. 

(e) The possibility of securing greater uniformity in the laws 

relating to trade and commerce, in customs regulations, 
and the more effective protection of trade-marks. 

6. The Extension of Inter- American Markjets. 

(a) Long-term credits as a means of stimulating inter- Ameri- 

can trade. 

(b) Acceptances and discounts (including warehouse receipts) 

as a means of extending inter- American trade. 

(c) The establishment of direct exchange (often referred to as 

"dollar exchange") as a means of extending American 
trade. 



PROCEEDINGS. 117 

6. The Extension of Inter- American Markets — Continued. 

(d) The adaptation of the manufactured products of the United 

States to the needs of the nations of Central and South 
America. 

(e) Tariff laws as they affect trade with the United States. 

7. Merchant Marine and Improved Transportation Facilities. 

(a) Increased and improved ocean transportation facilities. 

(1) The present needs in this respect. 

(2) Statement of shipping facilities now enjoyed. 

(3) Suggestions as to the best means of securing im- 

proved transportation service. 

(4) What public or private encouragement for improved 

transportation facilities can be expected from the 
countries represented at the Conference. 
(h) Improved postal facilities (including money orders) and 
parcel post. 

It must not be understood that the group conferences are to con- 
fine themselves to the questions I have suggested. They may dis- 
cuss any other subjects or matters that they or the delegates of the 
United States may care to introduce. 

There will be several general sessions of the conference, at which 
subjects of common interest will be considered. These subjects may 
be covered under three heads : 
Finance, 

■J- Commerce, and 
Transportation. 

Finance and commerce, or trade, march hand in hand. They in 
turn depend upon adequate means of transportation and communica- 
tion. It is hoped that in the general sessions the delegates from the 
foreign countries as well as the bankers and business men of the 
United States will discuss these subjects or any related subjects in the 
fullest and frankest manner. 

The questions of ocean transportation and improved means of com- 
munication are particularly interesting at this time, and a full 
expression of opinion upon these important phases of the general 
problem will be of value. Remedies can not be applied nor the 
fullest measure of cooperation secured unless complete and authentic 
information is supplied. 

The Postmaster General of the United States has kindly consented 
to discuss the subject of improved postal facilities to South America, 
and the Secretary of Commerce of the United States has been good 
enough to agree to discuss some of the important questions of com- 
merce. I am glad to leave these questions to the superior abilities 
of my distinguished colleagues, and hope that their remarks may 
encourage the members of the Conference to engage in a general dis- 
cussion of these interesting subjects. 



118 PAN AMERICAN FINANCIAL CONFERENCE. 

The question of the establishment of branch banks of the United 
States in the various South and Central American countries and 
the establishment by those countries of branch banks in the United 
States deserves your earnest attention. Commercial credits and 
direct exchange and the facilitation of commercial transactions 
depend upon the right sort of financial organization. Under our 
Federal reserve act the national banks of the United States have 
consolidated and organized their credit resources in such a way 
that they are, for the first time in the history of this country, pre- 
pared to do a large amount of foreign business. They are also, for 
the first time in our history, authorized by law to establish branches 
in foreign countries. Already some of our banking institutions 
have established branches in South and Central America. Under 
our Federal reserve act the Federal reserve banks themselves may, 
with the approval of the Federal Eeserve Board, establish agencies 
in foreign countries. The potentialities of the Federal Reserve Act 
are not yet fully appreciated, I think, by our own people, but as 
time goes on its beneficial effects will be more and more felt and 
more and more realized. We have now the opportunity to become 
a powerful factor in world finance, not only because of the Federal 
reserve act to which I have alluded but because of the strength of 
our own economic position. 

This conference meets at a time when we are celebrating the re- 
moval of the greatest physical obstacles to closer commercial rela- 
tions between North and South America. The completion of the 
Panama Canal possessses a significance far deeper than the economy 
of time in transportation. It means the establishment of a new com- 
munity of trade interests and must inevitably bring with it closer 
cultural and intellectual relations between the northern and southern 
sections of this hemisphere. [Applause.] 

A combination of circumstances and forces — economic, political, 
and moral — is bringing us each day to a fuller realization of the 
part that we are called upon to play in giving to the world an ex- 
ample of the possibility and practicability of international coop- 
eration. 

Nothing would so stimulate trade between the southern Republics 
and the United States and make so certain the investment of United 
States capital in those countries as laws of substantial uniformity 
relating to commerce and finance, particularly in such matters as 
trade-marks and patents, consular invoices, bills of lading, regulation 
of commercial travelers, admission of samples, and many features of 
the custom laws, bills of exchange, uniform money standard, and 
various other things which it is not necessary to enumerate. I desire 
to appoint a committee, consisting of one member selected by the 
delegation of each country represented here, to consider the question 
of uniform laws and submit a report before the close of the confer- 
ence. I would suggest that this committee consider a recommenda- 



PROCEEDINGS. 119 

tion that a high commission, consisting of representatives of each 
government, be created for this purpose. Such a commission, acting 
under the authority of the various governments, could go thoroughly 
and intelligently into these important matters and recommend appro- 
priate legislation. 

The future of the Western Hemisphere gives promise of a prac- 
tical and altruistic leadership that will in time powerfully and bene- 
ficially influence the course of world events. We have only to keep 
a clear vision, to cultivate the spirit of mutual helpfulness, to com- 
bine with our practical materialism a noble and humane idealism, to 
stand firmly for high moral principles, and to maintain unfalter- 
ingly the sacred rights of humanity. Let us hope that this great 
conference may contribute to that end. [Prolonged applause.] 

Now, gentlemen, I have the pleasure, and the honor as well, of in- 
troducing to you the Postmaster General of the United States, who 
will talk to you about postal conditions. [Applause.] 

ADDRESS OF HON. ALBERT S. BURLESON, POSTMASTER GENERAL 
OF THE UNITED STATES. 

Mr. Chairman and Gentlemen of the Pan American Financial 
Conference : 

It gives me pleasure to have this opportunity to assure the mem- 
bers of this Conference that the Post Office Department of the 
United States will use its utmost endeavor, and avail itself of every 
facility, to remove obstacles it can reach which interfere with the sat- 
isfactory trade conditions between the countries of the Western 
Hemisphere. It goes without saying that satisfactory trade relations 
between two countries can not exist unless they have the aid of an 
efficient postal service. 

Recognizing this fact, when I was called to the head of the Post 
Office Department I directed my attention at once to the condition 
of postal affairs existing between the United States and other coun- 
tries of North, Central, and South America. The letter postage rate 
existing at this time between the United States and Central and 
South America was fixed by the Universal Postal Congress, which 
convened in Rome in 1906. It became operative in 1907, and it fixed 
the postal rate for letters at 5 cents for the first ounce or fraction 
thereof and 3 cents for each additional ounce or fraction thereof. 

But by special conventions the United States established a 2-cent 
rate between the United States and the other countries of North 
America. These countries found it mutually advantageous. I do not 
say that it was the cuiise of satisfactory trade relations growing up 
between them, but much more satisfactory conditions exist between 



120 PAN AMERICAN FINANCIAL CONFERENCE. 

the United States and the other countries of North America than 
between the United States and the countries of South America. 

Believing that I should do everything I could to improve the 
postal facilities between the United States and the countries of Cen- 
tral and South America, I caused to be addressed to each of those 
countries a proposal that they should be given the advantages of the 
domestic rate of 2 cents, just as it existed between the United States 
and Mexico and the United States and Canada. 

Unfortunately the European war came on, and the countries of 
South America and Central America found it inadvisable from their 
standpoint to make any change in the postal rate, because, as they 
believed, it would diminish their postal revenues, which they were 
unwilling to suffer at this time. 

But, gentlemen, the opportunity will be given your countries again 
immediately upon the cessation of this horrible war across the 
waters, for then I purpose again to press it upon the attention of 
each Central American and South American country that they ought 
to avail themselves of an opportunity to enjoy the domestic rate of 
2 cents on letters going from this country, and whatever the domes- 
tic rate is in their country, for letters coming from their country to 
the United States. 

I confidently believe that if they would enter into this arrange- 
ment with the United States the increase in the volume of business 
would result in an increase in the volume of mail matter, which 
would more than offset the postal revenue that would be lost by 
reducing the rate. [Applause.] 

I believe that one postage rate should be common to every country 
upon the Western Hemisphere, and a letter written in Patagonia 
ought to go up to the farthest point in British Columbia with a 
stamp of the same denomination that is used between this country 
and Cuba or between our country and Argentina, or any other coun- 
try on this hemisphere. 

Another thing I soon discovered, gentlemen : When I assumed con- 
trol of the Post Office Department we had in this country, recently 
established, a parcel-post system, and it has developed somewhat. 
You will recognize the fact that there has been — without any boasting, 
now, I make the statement — *a phenomenally rapid development of 
this service. During the last fiscal year we transported in this coun- 
try through this service more than a billion parcels. 

I immediately took up with South American and Central Ameri- 
can countries the negotiations of conventions for the transportation 
of parcels in the post. The United States now has a convention with 
every Central and South American country save two ; and yet there 
has been practically no development of the parcel-post traffic between 



PROCEEDINGS. 121 

this country and Central and South America. The last fiscal year we 
sent from this country to all of South and Central America and the 
West Indies only 256,942 parcels, a smaller number than is sent out 
in the forenoon of one day in some of the cities of the United States. 
And what is the cause of that? Why is it that traffic between the 
United States and Central and South American countries can not be 
developed through the parcel-post system? Under the operation of 
the service in the United States I have told you of the development 
that we have had here. Only a casual investigation will convince one 
that the failure to develop the traffic with our neighbors is the lack, 
first, of frequent and regular steamship transportation facilities; 
second, proper banking facilities ; and third, conventions between the 
United States and Central and South American countries for an 
exchange of money orders. You can understand this lack of devel- 
opment when you are told we have only one line of steamers between 
the United States and South America and that sailings take place at 
infrequent intervals. 

You can understand that we can not develop a parcel-post service 
without the assistance of an efficient money-order service. And 
do you know that at this time there is a money-order convention of 
the United States with only three Central American countries and 
with only four of the great countries of South America? I have said 
great countries of South America. I am not going to name them, 
but these conventions are not with the great countries of South Amer- 
ica but with four of the smaller ones. Now, gentlemen, there is a 
reason for this. These countries have been given the opportunity, 
time and time again, to enter these conventions, and the matter has 
been taken up by the authorities of the United States with each 
of the directors or controllers of postal affairs of various countries 
of South and Central America, and the advantages of this service 
have been pointed out to them. Two of the countries of South 
America do not even have a domestic system of money orders', but 
all of them, save these two, have a very efficient domestic system of 
money orders, and yet, as I tell you, we have a money-order exchange 
convention with only seven countries of Latin America. One of the 
reasons why we do not have it is the varying standards by which 
values are measured as well as their wide and frequent fluctuations. 
Before we can have satisfactory money-order conventions between 
the United States and all the countries of Central and South America 
there must be established in this country, in my judgment, a banking- 
facility that will enable us to have exchange in dollars and not in 
pounds sterling. [Applause.] 

Gentlemen, I have given in brief the outline of the condition of 
postal affairs as between our country, my country, and the various 



122 PAN AMERICAN FINANCIAL CONFERENCE. 

countries of Central and South America. If fairly satisfactory trade 
relations are to be established between these various countries, we 
must have efficient postal service between each and all of them. 

In my opinion, the first thing that must be done is the establish- 
ment of proper, frequent, and regular steamship transportation 
facilities; not for the advantage of the United States, for, in my 
opinion, this ought to be done in cooperation between the countries 
of South America and the United States or between the citizens of 
the countries of South America and the citizens of the United States. 
[Applause.] Not for the advantage of one over the other, but for 
the benefit of all. Then good banking facilities and postal relations, 
and we are in sight of the goal. 

So far as I am concerned, gentlemen, I have now covered the sub- 
ject matter which the Secretary of the Treasury gave me to discuss. 
Again I want to assure you of every endeavor of mine as Postmaster 
General to improve the postal facilities between the United States 
and all the countries of South and Central America. [Applause.] 

This is a most important conference. If you gentlemen do your 
work well, in my opinion the result will not only prove of lasting 
benefit to our countries but it will the more firmly cement the sincere 
friendship which at this time happily exists between all of the coun- 
tries of North, Central, and South America. [Prolonged applause.] 

Secretary McAdoo. I now have the honor of introducing the dis- 
tinguished Secretary of Commerce of the United States. He has 
made a very thorough study of South American problems and he 
knows all about commerce. I feel sure that you will be delighted to 
hear from him. 

ADDRESS OF HON. WILLIAM C. REDFIELD, SECRETARY OF 

COMMERCE. 

Mr. Chairman and Gentlemen : 

It seems to me that it is rather a grave duty to speak to you to-day, 
for what is said now is said at such a time as man never knew before, 
at least since the industrial and financial system which we use was 
founded. Almost all the world is on fire except ourselves, and we, 
both of the North and the South, have felt some of the reflected heat. 
The sources of credits, yours and, to some extent, ours, were suddenly 
shaken or broken. The currents of trade with which we were 
trained to be familiar and on which we have hitherto depended 
were suddenly stopped and there has been in every land here repre- 
sented more or less distress. Gentlemen, we are gathered here rep- 
resenting two great continents with many common ideals, but too 
little in touch with one another in the past. It is not an official part 



PKOCEEDINGS. 123 

of our program, but it is a real fact behind our program, that the 
shock of war has thrown the Americas together. They must see 
what they can do for themselves at a time when contact with a 
large part of the world has been rudely interrupted, and we are here 
to determine what it is possible to do to help one another, for we 
know, as truly as men can know the future, that the thing which 
has occurred between Europe and ourselves can not occur between 
the Americas. The conditions do not exist that can make it think- 
able that there should be between the North and the South and the 
East and the West of America such a situation as unhappily has 
broken the intercourse with our brethren on the other side of the 
Atlantic. [Applause.] 

I should do injustice to you and to myself if I did not express, first, 
a pleasure and, second, a hope. The pleasure is that which is common 
to myself and my colleagues in the Government of the United States 
in having you here where we can meet one another face to face and 
hand to hand, where we can talk together of needs and opportunities 
and come by personal contact into that thorough understanding 
which it is difficult to reach in any other way. The hope that is in 
my mind is that this conference shall not be one merely of pleasant 
fellowship and even of delightful association leading to happy 
memories but that it shall be the beginning of tangible things upon 
which there shall be built a structure of mutual self-help that shall 
]ong endure to our common good. Out of the words that shall here 
be spoken let us both intend and strive that deeds shall come, acts 
which shall be effective and lasting, tracing their genesis to this hon- 
orable source. 

With this background, therefore, of pleasure and hope so inade- 
quately and briefly expressed let me discuss with you matters of 
mutual concern. 

First of all, therefore, we will speak frankly of certain miscon- 
ceptions, and will begin with one of our own. Too much in this 
country is it the habit for business concerns to insist when making 
sales upon cash with documents. This means, of course, where goods 
must travel far that the seller is in possession of his money long 
before the buyer has opportunity even to receive the goods, much less 
to sell them and get paid for them. It is obvious that this process 
carried to an extreme would require an abnormal proportion of free 
money on the part of the buyer and a considerable loss of interest 
and use of same because it would be tied up while the goods which 
it represented were still in transit. There are, to be sure, business 
houses that prefer to buy their goods this way because it permits 
them not only to take advantage of cash discounts but to give 
them that power in buying which is always his who has the money 
ready with which immediately to pay. The method, however, is 



124 PAN" AMERICAN FINANCIAL CONFERENCE. 

one which is not possible to many a solvent merchant, and this being 
so it is restrictive of the operations both of the seller and of the 
buyer. In so far as it arises from ignorance, as it often does, it indi- 
cates to some degree the extent to which such ignorance acts as a 
handicap to the seller. In so far as it arises from distrust of respon- 
sible houses, it is almost an impropriety provided such distrust could 
be removed by available means of information ; and if there were no 
reason for the distrust, then is the seller doubly hurt, both because 
he has made a business mistake in feeling the distrust and because 
he is hampered by the ignorance out of which it arises. 

There are, as every business man knows or may know, houses in 
every important city in the world a debt from whom is a good asset, 
and with reasonable care our business concerns should be, and many 
are, willing to sell abroad on open account, as they do at home. The 
extending of long credits, concerning which much is said, seems to 
me, however, a function rather of the banker than of the manu- 
facturer. The latter is himself the victim of short credits. He must 
pay immediate cash for his labor and often for his materials. If he 
under these conditions is to sell on very long credits, he must be paid 
for so doing in the prices that he must charge. Long credits, there- 
fore, do not permit cheap goods for the buyer, but the reverse. The 
manufacturer who can close an account quickly and proceed to an- 
other transaction can afford, through the rapid turnover of his funds, 
to sell at a margin impossible for him who by reason of long credits 
must do business on a more extended and more costly basis. 

On the other hand, it is, of course, true that the solvent merchant 
who may not be able to afford cash with documents for goods which 
may be weeks in reaching him may still have credit amply good to 
warrant advances on the part of a banker to pay for actual mer- 
chandise from which when sold the seller will receive more than 
sufficient to repay the loan. The more normal process of trade, 
therefore, would seem to be not for the buyer to call upon the seller 
to grant long terms, with the corresponding disadvantage in prices, 
but for the banker to intervene, and seeking only normal interest 
on sound loans to carry the transaction over from the seller to the 
buyer in such wise as to be a burden to neither while profiting him- 
self for his useful service. 

There is, however, another side to this whole matter. Just as it 
is true that some houses prefer to buy cash against documents so 
it is true that there are large houses among our industries that are 
willing to sell on long terms. At this point, however, comes in 
another principle, which is quite as important as that either of 
prompt cash or long time, and this is the principle that however 
payment is to be arranged it should be the absolute standard of 
practice that it should be made just as it is arranged. If we must 



PROCEEDINGS. 125 

plead guilty in part to such ignorance of credits abroad on the 
part of some of our sellers as induces them at times unwisely to 
demand cash against documents, it is also true that sometimes our 
sellers who have extended the longer credits demanded have not 
received payment at their maturities. What is essential seems to 
me to be the carrying out of the transaction with equal accuracy 
in all its forms. If the buyer desires goods shipped by a certain 
steamer on a certain day he should himself be prepared to make his 
payment with similar certainty. If this one thing were done a 
serious difficulty would immediately disappear from our mutual 
transactions. It is so evidently sound that I venture to hope the 
influence of those here assembled may be exerted strongly and con- 
tinuously in its favor. 

Having spoken thus frankly on one phase, let us now proceed with 
equal plainness to another. It is perfectly well known to our friends 
in Latin America that we of the north lack the more gracious and 
formal manners so pleasantly visible throughout our sister nations 
to the south. We have not the same courteous style in correspond- 
ence. We lack the recognition of the politenesses which so pleasantly 
illuminate the path of our Latin- American brethren. We are thought 
abrupt if not rude in manner and in speech, especially in written 
speech, and if this be taken relatively it has in it a certain measure 
of truth. Our business proverbs do not tend to cultivate the charm 
of business intercourse. We speak of " getting to the point," or we 
say the "gist of it is so-and-so," as if the commercial result were 
the sole thing involved in business intercourse. In this we may 
grant you we are losers, for in believing there is no sentiment in busi- 
ness we lose sight of the fact that there is, after all, a great deal of 
sentiment in commerce, which is, indeed, more influenced by senti- 
ment than many of us like to think. We lose the charm of the per- 
sonal and friendly touch and become too nearly automatic in our 
commercial affairs, turning our salesmen too nearly into selling ma- 
chines and depriving them in their business work of the finer sides 
of life. All this is true. It has arisen in part out of the circum- 
stances of our history and out of the differences of background. It 
does not mean, however, all that it seems to mean, for behind the 
abrupt word and the curt speech lie often the hand and heart of a 
willing friend. A man who signs himself " yours truly " may be as 
genuinely a friend as he of the more formal address ; and if we, upon 
our part, have to learn something of the more stately courtesy of 
speech, possibly there may need to be learned something also, on 
the other hand, of how much genuine character and good will may be 
crowded into brief words. 

There is, I venture to think, sometimes a tendency in other lands 
to regard us as ill-bred because of this assumed brevity of speech or 



126 PAN AMERICAN FINANCIAL CONFERENCE. 

because of certain characteristics of language or of manner that 
seem, to say the least, peculiar to people accustomed to statelier ways 
of intercourse. I have no doubt that this conception has wrought a 
double harm. It has, upon the one hand, led to a misunderstanding 
of the genuine spirit behind the brusque words and actions and, upon 
the other hand, to a misapprehension on our part of the value of the 
courtesies which make life both tolerable and comfortable. For my 
part, I am willing to agree that we have much to learn in the ameni- 
ties of commerce. I only plead for my countrymen concerning this, 
that they are kindlier, more genuine, more sincere, and altogether 
more worthy than they may seem to be when projected against a 
background to which they have had no opportunity to become ac- 
customed. [Applause.] 

May we think together now of certain matters that should be (to 
use our current phrase) "ironed out" before we shall reach that 
readiness of intercourse so greatly to be desired between us? Busi- 
ness to move freely should be as nearly automatic as possible. Its 
processes should be simple, direct, inexpensive. Anything which puts 
an obstacle in the way of the easy interchange of commerce affects 
that commerce only hurtfully. The currents of trade should flow 
for mutual good along the lines of least resistance. Practically, the 
question of licenses for commercial travelers is sometimes a serious 
one. We used to have them here in various forms between our sev- 
eral States, and in one or another way efforts have from time to time 
been made to tax in one State travelers coming from another. This 
has all passed away under the overshadowing protection of our 
Federal Constitution, under which commerce is absolutely free and 
unrestricted between the sovereign States which form this Eepublic. 
I feel that between nations a tax in the form of licenses for com- 
mercial travelers is simply another way of restraining commerce 
from proceeding; that it is simpler, cheaper, and in the final result 
far wiser to avoid such forms of expense imposed on trade in order 
that from the larger trade which grows normally when it moves 
freely greater revenues may in more normal ways be secured. 

"We do not suggest, nor have we in the back of our thought, that 
any privilege should be extended us not granted on equal terms to 
others. We want no special favors in the peaceful contests of com- 
merce. We think it would be better for all concerned if there were 
as little as possible in the way of obstacles put in the way of the trade 
of all peoples. The least necessary friction on the flow of commerce 
seems to us the wisest course. 

There is one thing incidental to what I have to say greatly needed 
in South and Central America concerning us of the north, and that 
i ssome systematic and reasonably accurate news service which shall 
not publish throughout all our sister nations the small and the narrow 



PROCEEDINGS. 127 

and the poor and the bad exclusively. I have discussed this impor- 
tant question with the managers of our leading press associations 
and they deplore it but find themselves for the moment helpless con- 
cerning it. There is no direct cable connection now, they tell me, 
for press dispatches, for example, with the city of Eio de Janeiro, 
and I feel that we suffer in the eyes of our brethren at the south for 
lack of a truthful picture of us presented every day in the columns 
of the daily press in the cities of Spanish xlmerica. 

We think it should be made a matter of care that your great com- 
mercial centers should be connected with those of all the world on an 
equal basis. It should be as cheap and convenient for you to commu- 
nicate from your cities with ours as with those of Europe. At present 
it is possible for you to cable from some of your cities to European 
points at a considerably less cost than to our own, and in some cases 
the difference is striking. Without knowing how far this matter 
may be within the direct control of your several Governments, it 
seems to me that a sound policy can be laid down on this subject in 
this way : It should be as easy and as cheap for all America to com- 
municate with itself as it is for it to communicate with lands across 
the sea. There ought to be no handicap of telegraphic rates between 
American countries in favor of European ones. Yv r e of America are 
in a sense of one international family, and we should see to it that 
the family is not at a disadvantage in this important respect. [Ap- 
plause.] 

The same thing is true in matters of transportation. I suppose no 
nation has ever paid so great a premium on behalf of its commerce 
as we have paid in the cost of the Panama Canal. If we are to get 
the results of that investment there must be ships under our own 
control to navigate that canal wherever and as often and of such a 
character as the needs of our commerce require. This, one might 
think, is purely a matter for ourselves, but it is not wholly so. It 
ought to be the case that all of the peoples here represented shall be 
bound together by ocean transit lines as frequent and as good as those 
which ply from any land to our common ports. 

Upon these general statements most men will agree, save, perhaps, 
those whose direct interest in this subject may lead them to look with 
normal hesitancy upon a larger competition in their own field of 
activity. The nations require better means of transportation. More 
and better ships are necessary to bring your goods to us and ours to 
you ; aye, to bring you here and take us yonder. It is a vital neces- 
sity that if America is to be more closely knit together it should be 
made as easy and as rapid as possible for us to go and for you to come 
and for our letters and our goods to move frequently and with speed. 
We are in this country in the humiliating position of doing our for- 
eign trade by the consent of those other peoples who have the ships 



128 PAN AMERICAN FINANCIAL CONFERENCE. 

to carry it. This consent is of course given so long as it is profitable 
for them to give it. The danger of the situation lies in the fact that 
our interests may not always be common, and when they diverge 
they may if they will divert the means whereby our commerce lives. 
So long as they neecl the things that we produce and can profit by 
moving them for us they will of course do it; but if some sterner 
necessity arose with them they might neither be able nor willing so 
to do, and then we would suffer. I do not think the people of the 
United States, when once they realize that it has been by the protec- 
tion of foreign navies only that we have been able to carry on our 
foreign commerce in recent months, will be willing long to have it 
remain so. The question is one for which we are earnestly seeking 
a solution, and contributions that can be made to sober and to pro- 
gressive thought upon* the subject will be welcome to us from 
wherever they may come. 

We have suffered no little here from men who rose to speak on 
this theme with negatives in their minds, whose first expression was 
" Thou shalt not," and unhappily these negatives have been far too 
powerful thus far, so that the merchant fleet of the United States 
is all too near itself being a pure negation. We hope that a more 
affirmative spirit may arise, in which the getting of a merchant 
marine into active service may be understood to be so vital a matter 
that the men with the negatives will cease to be so powerful as 
hitherto they have been, and this people of ours, which prides itself 
upon being an affirmative people, may in some manner get that 
which they are beginning to see as essential at once to their pros- 
perity and their self-respect. We earnestly desire the development 
of a merchant marine which shall facilitate intercourse between us, 
which shall make the names of your ports and of your mercantile 
houses both welcome and common among us. 

It is frankly recognized that there are readjustments necessary in 
some of our commercial ideas and methods if we of the United States 
are to develop our commerce with South and Central America in the 
most helpful and permanent way. We must learn not so much to 
offer the things we want to sell as to make and offer those which the 
customer wants to buy. It is not to be expected that markets in other 
lands will wish to use the goods which please us here. The mere 
fact that we happen to like an article of a certain design or color 
is no reason why anyone else should like it. It does not follow at 
all that because something sells well here, therefore it will sell well 
elsewhere. Some of us must learn to do our business more intelli- 
gently in this respect, and I am happy to say that there is a growing 
and, I think now, a fairly general understanding of this primary 
fact. 



PROCEEDINGS. 129 

There is another subject of which I have frequently spoken, my 
American friends of the north. Suppose a Russian salesman comes 
to your city to sell you goods, in New York or Boston or St. Louis 
or Chicago, and he presents to you literature in Russian, with 
Russian weights and measures, and he himself speaks only Russian. 
How many goods will you buy of the Russian salesman? And 
yet precisely that process is what we of the United States have 
at our infinite cost attempted to do almost all round the world. 
I speak from personal knowledge. A business house in one of 
our two largest cities sent a package of goods to a European city 
where I had an office. It lay some days untouched beside my 
office in the hall. At last, to get it out of my way, I opened 
the box. In it was a lot of English literature, in feet and inches and 
pounds and ounces, and it was intended for consumption in a French 
community. Yet the North American house that sent that box was 
conspicuous in the United States for its wealth, its size, and its power 
in its business in this country, and its name is a household word 
among many of our business men. That is a kind of primary busi- 
ness we must get well over before we shall be treating our friends in 
the Southland with proper respect. 

Again, we must learn not to put our business in other lands in the 
hands of those citizens of other countries whose interests may be at 
least as great in the products of their own land as they are in those 
of this country, if indeed they are not much greater. The producers 
of the United States must not only offer their wares in other coun- 
tries of such a kind as please the people in those countries but they 
must do it through media which take a primary interest in the prod- 
ucts of the United States and not a secondary or possibly an adverse 
one. [Applause.] 

May a word be said in strong assertion of the fact (sometimes in 
some places questioned) that the merchants and manufacturers of the 
United States are honorable men, seeking to do business by methods 
that are open, sincere, and morally sound. We know that such a 
thing as substitution of goods for others which were ordered has 
happened. We know that there are those who have insisted that 
they know better what the buyer wants than he does himself. We 
know that instructions have been ignored and that matters which 
were not understood by us did not receive the attention that should 
have been given. These things are true, though not to the extent, I 
hope, that has at certain times been alleged. They are not evidences 
of indifference or of purpose to do wrong. They are, rather, normal 
indications of beginning to do a kind of commerce the nature of 
which was not fully understood for lack of experience in it and they 
are passing things — indeed have largely passed away, and they are 

98257°— 15 9 



130 PAN AMERICAN FINANCIAL CONFERENCE. 

also things against which our business public, which is intent on 
doing its work in the right way, seeks carefully to guard itself and 
on which it welcomes light. 

Let me emphatically state that confidence may be put upon the 
honor of our business houses and their purpose to give value for value. 
In every large country there are individuals who sin, but we are all 
too wise to judge the country a wholesale sinner on that account. 

A beginning has been made (a welcome beginning, but only a 
beginning) in placing American banking facilities among the peoples 
of Spanish America. It is earnestly to be hoped that this may greatly 
increase and that it may not be long before in every important cen- 
ter throughout America there shall be a banking institution through 
which the currents of fiscal affairs may readily flow through ail the 
length and breadth of our two great continents. I hope the day will 
soon come when the securities of the different nations here repre- 
sented, and of the subdivisions thereof and the great enterprises 
therein, shall be well known in our exchanges ; and not only so, but 
it shall also soon come to be true that in every important city in the 
lands here represented it shall be an ordinary and simple thing to 
receive and to remit funds drawn upon strong financial institutions in 
either of the two continents whom we represent. Such an ideal can 
not be rushed into being, for haste would mean waste, but it is 
earnestly to be desired that there shall be steady progress toward it. 
We recognize that if the commerce between us is to be of mutual 
service we must do our share of the buying as well as of the selling, 
and we welcome every instrumentality which makes it easier for us 
to do our part. [Applause.] 

Finally we pass to our conception of commerce, and especially to 
the form which it seems that commerce must for the present take if 
it is to be developed to the full. There are in many of your lands 
great resources, some of them all but untouched. They need the 
magic power of money to turn them into living factors in your na- 
tional life. The great stream of credit which has flowed out from 
European bourses is interrupted or cut off. America is in a peculiar 
sense thrown back upon herself. This is true throughout her length 
and breadth, in all her divisions. Never was she since our com- 
mercial and industrial and financial system was established so 
isolated from the world upon the one hand and so necessary to the 
world upon the other as now she is. It is, of course, true that a 
great, and in some respects a growing business, is being done, par-, 
ticularly between us and the other peoples of the world who have 
been deprived by the war of the sources of supply which have been 
normal to them. Nevertheless it is financially true, so far as we of 
the United States are concerned, and it is commercially true in 
large measures so far as our sister nations of Latin America are 



PROCEEDINGS. 131 

concerned, that we are independent, or rather separate in a sense 
that we have never known before. That separation has not been 
wholly happy in some of its results. It has deprived many of our 
sister nations of sources of credit to which they were accustomed, 
of sources of supply from which they have long drawn, and nothing 
has as yet arisen to take their place sufficiently. 

It is here that the door opens for great good, if we are but wise 
and courageous enough to see it. The peoples of Latin America 
have been richly endowed by nature. They have great abundance 
of the things which are drawn out of the bosom of the kindly earth. 
We of the United States, being blessed also in this same respect, 
have been fortunate in having added a highly developed and power- 
ful industrial system also. The machines in our factories may be 
said to yearn for the supplies which come from the fields and for- 
ests of the south. Much that is there grown is indispensable to our 
needs. Much of it we can not at all grow ourselves. 

It has so happened that we, though until recently a debtor people, 
and perhaps in some degree still in that class, are also a great sav- 
ing people, and that under present conditions we have available 
larger amounts of free money than ever before in our history. I 
have noticed with much gratification that some of this money has 
been invested either in securities of Latin American lands or in 
the form of credits for them. If I note the current of affairs cor- 
rectly, it seems to me that the course which is indicated for the 
United States is to extend the right hand of fellowship and of aid 
to her sister nations of kindred forms of government, from whom 
the shock of war has, without fault of their own, removed the finan- 
cial basis on which they have hitherto largely depended. 

It is earnestly hoped both for the sake of American finance and 
commerce that the men who guide our fiscal institutions may see 
their way to a broader participation in the financial growth of 
Spanish America. There is no such solid foundation on which to 
build a great commercial structure as that of mutual self-help. If 
we who have the means will say to our brethren in the southern 
lands, "We are ready to help you to the extent of our power; we 
are not without our own problems, indeed, but we will serve you as 
well as we are able," then having done our part we may with more 
reason ask them for a larger share in the larger commerce that will 
normally spring out of our participation. 

Fortunately for us all the bankers and the manufacturers of the 
United States count among them many men of vision and of high 
ideals. They play the game of finance and commerce according to 
high standards and by fine rules. They look not so much at the 
thing which to-day is as at that which to-morrow shall be. They 
are willing to act to-day to help develop the to-morrow. They know 



132 PAN" AMERICAN FINANCIAL CONFERENCE. 

that more profit comes to each when both sides are gainers. They 
do not need to be told that rich prizes await him who develops the 
resources our southern sisters so abundantly possess ; but they are 
too wise to think that to attempt this in a purely selfish way would 
long remain either pleasant or profitable. 

We have begun to get together. Our men of light and leading in 
finance and commerce have taken the first step. There should be 
many more taken. The Department of Commerce, which I have the 
privilege of representing before you, will do all it can now and here- 
after to promote mutual intercourse to mutual gain, and will welcome 
suggestions as to how this can best be done. It possesses means of 
publicity at home and abroad. It will not hesitate to ask Congress 
for such further powers as may be shown to be practicable in the de- 
velopment of our mutual trade; and Congress, I believe, looks with 
broad sympathy on practical efforts to unite America in a commer- 
cial bond which means mutual intercourse for mutual good. [Pro- 
longed applause.] 

GENERAL ANNOUNCEMENTS. 

Secretary McAdoo. Gentlemen, I wish to make one or two an* 
nouncements before we proceed further with the work of the Con- 
ference. First of all let me say that the new edition of the program 
will be ready to-morrow. That will include the names of representa- 
tives of the United States, as we did not have acceptances from all of 
them at the time this edition went to press. 

I also wish to say that credentials may be delivered to the Secre- 
tary-General at the hotel, and that we shall defer the roll call of the 
delegates until to-morrow morning, when everyone will be here. 

In arranging the program it has not seemed wise for the presiding 
officer to suggest who shall speak for the different countries here 
or for the United States. We have purposely, therefore, refrained 
from putting on the list the names of speakers, because we wish you 
all to feel that you have the utmost freedom, and that at these general 
sessions anyone may rise and present any subject upon which he 
desires to talk. 

I notice that the program says there will be " remarks " by delegates 
and guests. I think that the word " remarks " has perhaps a different 
signification in Spanish from that which it has in English. I am 
led to believe that in Spanish it has a restricted sense, and that some- 
body may draw the inference that if a delegate wants to make an 
address or longer speech than mere remarks he may be precluded 
from doing so. I wish to assure you that the word is not used in that 
sense at all. Any delegate may speak just as long as he desires and 
upon any subject that he pleases. We have been asked if certain 



PROCEEDINGS. 133 

delegates might speak at certain times. Some requests of that kind 
have been made for the session to-morrow morning. I may say that 
if any of you should desire to speak to-morrow morning, or at some 
other session, and will hand your name to the Secretary-General 
he will be glad to see that you are allowed to speak at such time as 
can be arranged. I am alluding particularly to the foreign guests. 
I may say the same thing about representatives of the United States 
who are here, that if any of them should care to be put down for any 
particular time on the program and any day of the program, and 
will send their names to the Secretary- General, he will arrange 
it accordingly. I hope, however, that the conference will resolve 
itself into an informal discussion without any arrangements — I mean 
any prearranged plan for general discussions. I think we will prob- 
ably get better results that way. 

GENERAL REMARKS BY DELEGATES. 

Now, gentlemen, I am going to suggest to you that our foreign 
guests be permitted to open the discussion to-day, and we will pro- 
ceed in that direction as long as time will permit, and we will resume 
again to-morrow morning with the general discussion and have as 
thorough a talk as we can until the group committees meet to-morrow 
afternoon. After the discussion has proceeded as far as possible 
to-day I shall announce the group committees. I think perhaps it 
would be well to call on the representatives of the foreign countries 
in alphabetical order, as we did this morning, so that they may 
respond if they desire. 

(The Secretary-General, Dr. Rowe, proceeded to call the roll.) 

ARGENTINA. 

Dr. Samuel Hale Pearson. I am only going to say a few words, 
if you will excuse me. I simply desire to state that I, as one of the 
delegates of the Argentine Republic, have made a brief study of the 
finances of our country since its independence, beginning with the 
first loan that was made in the year 1825 by the firm of Brown Bros. 
& Co., of London, continuing the big financial operations which 
had been done with Messers. J. P. Morgan & Co. and Morton Bros. 
& Co., of New York, and up to the most recent ones with the National 
City Bank and various others of European connection. I have also 
made a few observations with regard to a number of banks. From 
the beginning, the first foreign bank, still in existence, was the Lon- 
don and River Plate Bank that started in the early sixties and holds 
to-day in Argentina a very prominent place and probably the first 
rank as a banking institution in the whole of South America. It has 
a capital bigger than that of any North American bank. I have ex- 



134 PAN AMERICAN FINANCIAL CONFERENCE. 

plained in a few words what was done in regard to our State loans 
before the crisis and the way the Government took up the old State 
loans, in order to rearrange its credit with guarantees. 

I do not want to read this now, because it is rather long. If you 
will permit me, I will pass it to the Secretary-General and have it 
printed and circulated, as I think it may be interesting to a great 
many of the gentlemen here to know exactly how the finances of my 
country are to-day and what they were one hundred years ago. 

Secretary McAdoo. If you will deliver it to the Secretary- General, 
he will have it printed in time for . distribution to the Conference, 
and it will also be printed in the final publication of the Conference. 

Dr. Eicardo C. Aldao. Mr. Secretary, I wish to say that arrange- 
ments have been made by my colleague, Dr. Pearson, by Which I shall 
devote my attention especially to trade and the legal side that may 
be of interest to my country. I have been occupied with that, and 
will present it to our committee when it meets, in order that it may 
be submitted to the Conference in general meeting. 

BOLIVIA. 

Dr. Ignacio Calderon. We have had the pleasure of presenting a 
memorandum of our finances. I am not going to make any special 
remarks now, but I may say that we have also printed a whole re- 
port of conditions in my country, its resources, and everything out- 
lined in the topics suggested in the preliminary program. Therefore 
I would rather wait until we discuss in private committee what sug- 
gestions can be made in order to be in a position to present the matter 
later to the general session. 

Secretary McAdoo. Let me explain that it is not necessary for the 
delegates to make any presentations at this time unless they care to. 
We simply wish to extend to them the opportunity. 

BRAZIL. 

Dr. Amaro Cavalcanti. I have no particular observations to make 
at the moment. I have some suggestions that I will lay before our 
committee at the proper time. 

Secretary McAdoo. Allow me to remark to the gentlemen from 
Central and South America, that if you will write upon a piece of 
paper the name of anyone that you wish to represent you on the Com- 
mittee on Uniformity of Laws and give that name to the Secretary- 
General while we are proceeding, it will save time. That may be 
done while the discussion is going on. Just agree upon your repre- 
sentatives and let us have the names. 



PROCEEDINGS. 135 

COLOMBIA. 

Dr. Santiago Perez Triana. Mr. Chairman, we have prepared a 
statement as to the financial burden of Colombia, from which can 
be gathered also what we may need in the future. I am ashamed to 
say that we have a very small debt. We should have borrowed 
more in the past than we have. We only owe 20,000,000 pounds 
sterling as against a population of 5J million people, and we have 
facilities for employing ten or fifty times that amount, and we hope 
we will be helped here, for the benefit of those who help us and for 
the benefit of ourselves. W T e began borrowing a little before the 
establishment of the Argentine Republic, when we were the Prov- 
ince of New Granada. They started in 1825. We started in 1821. 
Our first borrowings were from England, made in conjunction with 
the other two Eepublics — Venezuela and Ecuador — which at the 
time constituted New Grenada. Our credit is good, our facilities 
for employing capital are immense, and we shall try to expand all 
that in due course from resources that we have already, and also 
from additional ones. 

COSTA RICA. 

There were no suggestions to be made. 

CUBA. 

Dr. Pablo Desvernine y Galdos. Mr. Secretary, we are prepar- 
ing a statement to be filed at the proper time, which will include the 
topics treated in the preliminary program. I have taken some notes 
of what the honorable Postmaster General has just said when he 
referred, for instance, to the parcels-post arrangements which we 
have not as yet in Cuba. We do have, however, something pertain- 
ing to that, such as the money-order system and the standard unit 
of values, as well as good transportation facilities; and in spite of 
all this we lack parcels-post service with the United States. The 
reason for that has been the obstacles we have met in sending out 
some of our important products. For instance, in Cuba, if we had 
a parcels-post system it would mean that we could ship tobacco, 
cigars, and cigarettes; and, if my recollection is correct — of course, 
I may be mistaken in my figures — a minimum of only 3,000 cigars 
may be sent by mail to the United States. Therefore, if we did have 
the parcel-post service, we would not be in a position to send cigars 
here unless we sent the minimum of 3,000, which is not a convenient 
amount to be sent by mail. I am, however, negotiating with the 
American minister to Cuba, to sign an arrangement for a parcel 
post, and I think we will succeed ; and that Cuba will have the system 
which you now have, the standard unit of value and good transporta- 
tion facilities of the United States. 



136 PAN AMERICAN FINANCIAL CONFERENCE. 

All of that, of course, will be taken up by us and explained in an 
intelligible way. Owing to the pressure of time, this is all that 
I can say now, but the matter will be gone into in the memorandum 
that we shall present. 

Secretary McAdoo. Of course, these subjects that you are discuss- 
ing now will be considered very thoroughly in the group conferences. 
The roll was being called to see if there was any subject of general 
or common interest which ought to be brought before the full Con- 
ference. 

THE DOMINICAN REPUBLIC. 

Dr. Francisco J. Peynado. Mr. Chairman and gentlemen, I was 
highly gratified when I heard the suggestion urging the parcels post 
for reducing rates, etc., and I desire to say that those points have 
been covered in a proposition that has been drawn up by the Domini- 
can Government. 

The task of rapidly promoting a permanent increase of commer- 
cial business between the United States and the Latin- American 
countries is more than anything else an educational one. 

The war that is devastating half of the civilized world has already 
produced, and will continue to produce for some time to come, a 
tangible increase of inter- American commerce, as an inevitable re- 
sult of the closing of the ports of Germany and of Austria and of 
the withdrawal from the seas of the merchant vessels of those two 
nations. 

But the paralyzation of the German and Austrian commerce is 
only temporary; and if an educational campaign, to teach the 
countries of Latin- America that here in the United States are pro- 
duced or may be produced all the manufactured goods formerly ex- 
ported by Europe, is not undertaken at once and with tenacity un- 
doubtedly when the war is over the business will return in great 
part to the channels it followed before the war. This must be true 
for the simple reason that so short an experience with the goods of 
the United States, even though it were to be supported by the good 
will of the Latin- American Governments, would be impotent by 
itself to destroy habits and prejudices of many years standing. This 
result is the more likely to follow if little be done to convince Latin- 
Americans that the diversion of trade which came about through 
necessity can best be continued upon grounds of unquestionable con- . 
venience and profit. 

In an international educational campaign the most powerful 
weapon is the post. An army of traveling salesmen, as big as it 
might be, can not be compared — either in the rapidity of its effect 



PROCEEDINGS. 



137 



or in its ability to reach the remoter regions of a country, or in its 
possibility of serving equally the small and the large manufacturers 
and exporters — with the effect of letters, circulars, and the news- 
papers. 

The efficiency of the post is undoubtedly more immediately useful 
to the producer than to the consumer, and to the manufacturer than 
to the agriculturist ; and in this respect the United States should be 
chiefly interested in such an improvement. As consumers of manu- 
factured goods and exporters chiefly of agricultural products the 
Latin- Americans have little to advertise, since they know that their 
sugar, their cocoa, their hemp, their rubber, and their coffee will be 
sold here even though not advertised; and naturally the Latin- 
Americans may not see the necessity of undertaking a campaign for 
the purpose of educating their own people with regard to the fact 
that the goods they have previously obtained in Europe are also to 
be obtained in the United States. But this difficulty could easily be 
met by providing that the signatory Governments should contribute 
to the payment of the general service in proportion to the benefit 
received by each. 

In view of these considerations the delegation of the Dominican 
Eepublic has the honor of submitting to the conference the recom- 
mendation that a special committee be appointed to study Latin- 
American postal conditions and to propose to all the Governments of 
America a plan for a Pan American postal convention which shall 
include the following provisions : 

1. That the letter postage and the postage on circulars and printed 
matter between each and every country of the Pan American Union 
be established upon the same basis of rates as that now existing 
between the United States and Cuba and Mexico. 

2. The adoption by all the countries of the Pan American Union 
of the same rules and the same rates for newspaper postage as that 
now existing in the United States. 

3. The adoption by all the countries of the Pan American Union 
of a uniform service of postal money orders and parcel post. 

4. The establishment of a Pan American postal commission, with 
headquarters in Panama City, which shall act as a clearing house for 
the postal administration of all the signatory Governments. 

Secretary McAdoo. I wish to say that all of these addresses in 
Spanish will be translated promptly into English and printed as 
the Conference proceeds, with as much rapidity as possible, so that 
you may get the benefit of them in both languages, and that similarly 
addresses delivered in English will be translated into Spanish as 
quickly as possible and distributed in the Conference as rapidly as 
we can turn them out. But, in any case, in the final publication 



138 PAN AMERICAN FINANCIAL CONFERENCE. 

of the proceedings everything will appear both in Spanish and in 
English, and will have general circulation. 

(The above was interpreted by the Secretary- General.) 

ECUADOR. 

Dr. Juan Cueva Garcia. Mr. Chairman, the delegation from 
Ecuador has presented a memorandum upon this subject, and I 
understand that we are going to send it to the general committee 
that is to be appointed. As it covers a diversity of subjects, I 
would request that it be printed and circulated among all the Latin- 
American delegates as well as among the invited Americans gen- 
erally. As I understand it, the delegates attending this Conference 
are not empowered to sign treaties or pass laws, but I nevertheless 
hope that we shall be in a position to pass resolutions recommending 
some subjects, so that when the group committees report all the 
delegates may be informed what they are going to discuss. 

Secretary McAdoo. I wish to make it clear that these group com- 
mittees from each country are expected to discuss subjects that 
relate to that particular country, and we are leaving it to the dele- 
gates from those countries to make their own recommendations in 
such form as they desire to present them for incorporation in the 
final proceedings of the Conference. The general committee which 
is to be appointed this afternoon is to make a report and recom- 
mendation with respect to uniform laws only, and as a basis for con- 
ferences in the future to bring about that sort of uniformity. I will 
ask the Secretary-General to state that in Spanish so that all the 
foreign delegates may understand it. 

Dr. Juan Cueva Garcia. The suggestions made by Ecuador are 
of a general character. 

NICARAGUA. 

Dr. Pedro Rafael Cuadra. I beg to submit to the Conference a 
proposal which I consider of vital importance for international trade. 
I have observed in the economic history of several countries, and 
recently in that of my own, that an inflated currency is a terrible 
handicap to the development of international trade and commerce. 
It is hard to conceive worse conditions than those produced by the 
unsettling of business based on the shifting sands of a fiat money. 
So I have come to the conviction that there is not, nor can there be, 
any chance at all for closer economic relations between a country 
with a sound monetary system and another without one. It is not 
advisable for any merchants or credit institutions to encourage their 
business in countries with inflated currencies. 



PROCEEDINGS. 139 

For the reasons above stated, 1 think that for the Conference to 
"develop practical results of the most beneficial sort to our respec- 
tive countries, and even closer relationships between them," as we 
all hope, it is absolutely necessary to insist on the international 
advantage of a sound and stable currency in every country, and even, 
if possible, to have the Conference declare that an inflated currency 
is to be considered an injury to international commercial relations. 

Dr. Pablo Desvernine t Galdos (Cuba). Mr. Chairman, I am 
somewhat perplexed in regard to that general committee. Is it pro- 
posed that the general committee shall make a report as to the ad- 
visability for uniformity of laws, and state the reforms that ought 
to be made in one or two sessions ? 

Secretary McAdoo. I do not think you can do it in one or two ses- 
sions, but the idea was that while you are all here, representing your 
different countries, you might discuss and reach a conclusion, as far 
as practicable, as to those laws regarding which you are satisfied 
that uniformity would be advantageous; and you could make a 
preliminary report covering as much of the subject as you could 
agree upon, and that could be used as a basis for consideration by 
the different countries that are inclined to take up the subject 
seriously and elaborate it properly. It was simply to get the matter 
started. 

Dr. Desvernine y Gaedos (Cuba). We have studied the subject 
already. We intend to state, and to set forth, that we deem it very 
advisable that there should be some uniformity in commercial laws 
and customs regulations, but of course we had to restrict ourselves to 
some generality in that matter because going into detail with other 
countries makes it a difficult proposition. 

Secretary McAdoo. You can not go into the details of it, but you 
can discuss general propositions that would be applicable. 

The calling the roll was resumed. 

PERU. 
SALVADOR. 
URUGUAY. 
There were no suggestions to be made. 

REMARKS BY MEMBERS OF THE CONFERENCE. 

Secretary McAdoo. I should like very much to have the representa- 
tives of our country feel that they may say anything they care to 
bring forward for the consideration of the conference on any subject 
they may wish to present. I shall make no suggestion, but I hope 



140 



PAN AMERICAN FINANCIAL CONFERENCE. 



you will not hesitate to come forward and contribute anything you 
care to offer. 

Mr. Vanderlip, would you care to speak on the subject of branch 
banking ? 

Mr. Frank A. Vanderlip (New York) : 

Mr. Chairman and Gentlemen of the Conference — I am not pre- 
pared with any formal address on the subject of branch banking. 
As you all know, the Federal reserve law has made possible what 
was never possible before — that is, branches of national banks in 
foreign countries. We have made some little start at that, and will 
go a great deal further, I hope. 

It seems to me that we are in many ways in a specially happy 
position now to develop foreign branches and through these to 
develop foreign relationships. This Federal reserve law has made 
some fundamental changes in the banking situation in the United 
States. It has not alone given us permission to start branches, of 
course, but it has done other things that will be of great advantage 
in connection with these branches. 

The position that we are in at the moment, in reference to banking 
reserves in the country, is a thing that is worthy of note both by our 
visitors and by ourselves. I doubt if our own bankers have all of 
them considered clearly the full significance of the present position 
of the surplus reserves of the country. I have not the figures before 
me, but as I remember the last report of the Comptroller of the 
Currency shows a surplus reserve above the legal requirement of 
about $734,000,000. Normally the national banks of the United 
States have run along with a surplus above the legal minimum of 
perhaps 60, 70, or 100 millions of dollars. The new reserve law 
has reduced the reserve requirement, and we have now as a result of 
that reduction of reserve requirements, plus a dull demand, this 
enormous surplus of $734,000,000 above the legal requirements in the 
national banks alone. There is a similar plethora of reserves in the 
State banks. You may say that is merely a matter of reduction in 
your legal requirements. It is more than that, for the Federal reserve 
law makes it probably quite as safe banking to run a bank with the 
minimum reserve now provided as it was to run with the minimum 
formerly provided. That means, then, that we have in this country a 
perfectly enormous capacity for expansion of loans, and that is the 
point that I wish to get before your minds. 

We can probably expand loans two or three billions of dollars 
with the present reserves, and, indeed, there is a tendency toward 
augmenting those reserves by the importation of gold from nations 
that have a debit here and find the shipment of gold the only way to 
pay it. So, if we are in a state of unpreparedness for war, we are in 



PKOCEEDINGS. 141 

a state of preparedness for extending our financial relationships 
abroad and for developing our banking credits at home. 

I think that is a matter of very great importance for us to recognize 
in considering the building up of these new relationships that we are 
talking about with South and Central America. Most of those coun- 
tries are in much the position we were in a generation ago as to capi- 
tal. They are, indeed, in the position we occupied up almost to the 
present time, where they must look outside of their own countries 
for capital. 

We have found heretofore very full employment for our own capi- 
tal at home, but I believe our growing wealth and this new banking 
law and other considerations are going to open the field and greatly 
to increase our power for making foreign investments. The sum 
available for that purpose will be vastly greater than we have ever had 
before. That is one reason why I look forward to results flowing 
from this Conference and from the interest, which is certainly as wide 
as this hemisphere, that will grow into closer relations between these 
American countries. 

I thank you, gentlemen. [Prolonged applause.] 

Secretary McAdoo. The Secretary of Commerce begs me to ex- 
press his regret that a business engagement requires him to leave at 
this time. 

I would be very glad to hear from anyone else from the United 
States, unless you prefer to wait until to-morrow, in which event 
we will proceed to announce the appointment of committees. 

ANNOUNCEMENT OF COMMITTEES. 

I wish to say in advance that the assignment of committees 
has been an extremely difficult task. I confess it has caused us a 
great deal of perplexity. The desire naturally has been to assign 
the men who have come here to represent the United States to the 
different countries in such a way as would bring the delegates from 
other countries in touch with men of this country who are some- 
what familiar with the problems of those States to which they are 
assigned ; but it has not been possible to find in our own land a suffi- 
cient number of men who are familiar with the problems of the 
nations to which we have been compelled to assign them. 

Of course, this Conference is intended to be educational, anyway. 
It is expected to be educational to the men who participate in it as 
well as to the people of the various countries represented here. 
Therefore I hope that, although many of the American delegates 
may be unfamiliar with the problems of our good friends from 
South and Central America, they will yet learn from these round- 
table conferences something of one another; and that, as a result. 



142 PAN" AMERICAN FINANCIAL CONFERENCE. 

the reports we shall get from these group committees, and which 
will be embodied, as I said before, in the proceedings of the confer- 
ence, may be of very great value in furnishing information useful to 
everyone. I do not mean to say that every discussion that occurs in 
these group committees has to be reported, but such of the subjects 
as you do discuss, which you think it will be useful to incorporate in 
the proceedings of this Conference, we should like to have you report 
upon fully. 

And I want to ask those gentlemen who are here from the United 
States if they will be good enough to remain the full week and in 
every way they possibly can help our foreign visitors. These visitors 
have come a long way, with the expectation that we will get down 
to a serious basis of discussion and that we will all join in trying to 
get practical results from this Conference. I am satisfied that we 
can get such results, but the only way to do so is by a thorough and 
comprehensive discussion. 

And I therefore wish to urge upon the men who are here from 
our own country, not only as a matter of interest but also as a matter 
of courtesy to our guests, that they will stay and join with them in 
a complete study of the various subjects that will come before the 
group committees. 

Now, before I announce these committees I should like the Secre- 
tary General to call the roll of the South and Central American 
countries again, and let them indicate the name or names of the 
gentlemen they wish to represent them on the Joint Committee on 
Uniform Laws that I have spoken about. 

(The Secretary-General thereupon called the roll.) 

UNIFORMITY OF LAWS COMMITTEE. 

The Secretary- General, Dr. Kowe: General Committee on Uni- 
formity of Laws relating to Trade, Commerce, and International 
Commercial Court. (With special reference to such matters as trade- 
marks and patents, consular invoices, bills of lading, regulations of 
commercial travelers, admission of samples, bills of exchange, uni- 
form monetary standards, etc.) 

This committee is made up of one representative elected by each 
foreign delegation, as follows: 

Hon. William C. Redfield, Chairman. 

Dr. Samuel Hale Pearson, Argentina. 

Dr. Ignacio Calder6n, Bolivia. 

Dr. Amaro Cavalcanti, Brazil. 

Dr. Luis Izquierdo, Chile. 

Dr. Santiago Perez Triana, Colombia. 

Dr. Roberto AncIzar, Colombia. 

Dr. John M. Keith, Costa Rica. 



PROCEEDINGS. 143 

Dr. Pablo Desveenine y Gald6s, Cuba. 

Dr. Feancisco J. Peynado, Dominican Republic. 

Dr. Vicente Gonzales B. Ecuador. 

Dr. Juan S. Laea, Guatemala. 

Dr. Leopoldo C6edova, Honduras. 

Dr. Pedeo Rafael Cttadea, Nicaragua. 

Dr. Ramon F. Acevedo, Panama. 

Dr. William Wallace White, Paraguay. 

Dr. Isaac Alzamoea, Peru. 

Dr. Alfonso Quin6nez M. Salvador. 

Dr. Caelos Maeia de Pena, Uruguay. 

Dr. Pedeo Rafael Rincones, Venezuela. 

Members representing the United States : 

Hon. Chables S. Hamlin, 

Hon. John Baeeett, 

Hon. Chaeles M. Conant, 

Hon. D. R. Feancis, 

Hon. John Hays Hammond, 

Hon. John Bassett Mooee, 

Hon. Robeet W. Woolley, 

Mr. Geoege N. Numsen, 

Mr. W. L. Satjndees, 

Mr. Willaed Steaight, 

Mr. Samuel Unteemyee, and 

SUGGESTION AS TO CREATION OF COMMITTEE ON TRANS- 
PORTATION. 

Dr. Pearson (Argentina). Mr. President, before finishing the ses- 
sion of to-day I would like to say that this morning we heard with 
great pleasure and satisfaction the words of His Excellency the Presi- 
dent of the United States with regard to the ability to strengthen 
the relations between our countries of North, Central, and South 
America if we had fast and good steamship communications. I am 
sure that every one of us here present — I mean of all the Americas — 
would be very pleased if the honorable Secretary of the Treasury 
would name a special commission of a few of the principal citizens 
and most interested men who could give the best ideas as to how to 
form this combination of North, Central, and South America, united 
in a special commission that we might call the " Commission on fast 
navigation," to work out a plan whereby with individual capital or 
with the help of our Governments we could in a short time see a 
powerful steamship line that would help us to develop our common 
intercourse and at the same time know that we would be free from 
having to depend on European powers for the transportation of our 
merchandise and also to bring us here and to take you south, as we 
want all the Americas to know each other as we have been accus- 
tomed to knowing Europe. [Applause.] 



144 PAN AMERICAN FINANCIAL CONFERENCE. 

Secretary McAdoo. The suggestion of Dr. Pearson is a very 
valuable one, and it strikes me as a thing that we could probably do — 
that is, to appoint a committee to give special consideration to this 
question of transportation. 

I shall be very happy if the delegates from South and Central 
America consider overnight whom they would like to have appointed 
on such a committee, and at the session to-morrow morning it can be 
announced. 

I do not know whether you mean, Dr. Pearson, that there shall 
be a member of that committee from each of the countries repre- 
sented here? 

Dr. Pearson. No, sir. I think if we take the extremes, we will 
find that the countries in between would always be pleased with what 
we can do for them. So that if we take the extreme north and the 
extreme south and two or three of the principal representatives 
there, I think that will be sufficient. 

Secretary McAdoo. I did not understand to what extent the cen- 
tral American Governments are concerned in this steamship ques- 
tion, and it was for that reason that I was asking you what you had 
in mind. 

Dr. Pearson. My idea for South America was Chile, Argentina, 
Brazil, and Uruguay. 

Secretary McAdoo. Would you not extend that to Peru ? 

Dr. Pearson. Well, Peru has a good service now with the Isthmus. 
But I mean those countries where they have not. 

Secretary McAdoo. Then if you will be prepared to-morrow morn- 
ing, gentlemen, to suggest the names that you would like to have on 
that committee I shall be very glad to appoint them. 

Unless there is something else some gentleman would like to bring 
before the Conference, we will adjourn until to-morrow morning at 
10 o'clock in this hall. 

(Accordingly, at 5.10 o'clock p. m., the Conference adjourned.) 



THIRD SESSION 



TUESDAY MORNING, MAY 25. 1915 



98257°— 15 10 145 



THIRD SESSION, TUESDAY MORNING, MAY 25. 



The Conference met at 10 o'clock a. m., and was called to order by 
the Honorable William G. McAdoo. 

ANNIVERSARY CONGRATULATIONS TO ARGENTINA. 

Secretary McAdoo. Gentlemen, I want to say a few words this 
morning, and I have put them in writing, because I want to have 
them translated into Spanish by the Secretary General. 

My mind carries me back this morning to that memorable week in 
May, 1810, when the patriots of what is now the Argentine Eepublic 
were debating as to how they might best meet the crisis that had 
arisen in the affairs of their country. In reading the proceedings of 
that memorable May day one can not help but feel a deep sympathy 
with the perplexities and even with the doubts with which the leaders 
were beset. For a time it was not entirely clear to them what course 
they should pursue, but in the midst of all these troubles there shines 
forth that devotion to their country and to the public welfare which 
soon illumined the path they were to tread. 

To-day it is our privilege to do honor and homage to those great 
leaders whose brethren were carrying on similar struggles in the 
other Spanish colonies. I am but expressing what is in the minds 
of all of you when I extend our warm congratulations on the occa- 
sion of this glorious anniversary to his Excellency, the Argentine 
ambassador, and to each and every member of the Argentine dele- 
gation, and I propose for your consideration that a congratulatory 
cablegram be sent by this Conference to the President of the Argen- 
tine Eepublic. [Applause.] 

The cablegram that I would suggest is as follows : 

His Excellency, Dr. Victorino de la Plaza, 

President of Argentina, Buenos Aires. 
The Pan American Financial Conference, assembled in Washington, joins 
with you in celebrating this glorious anniversary of Argentine independence. 
We extend to the Government and people of Argentine our warmest congratu- 
lations and our sincerest wishes for the happiness and prosperity of the Ar- 
gentine nation. 

It is suggested that the cablegram be signed by the presiding 
officer on behalf of this assembly. Gentlemen, while this is not a con- 
vention, I am going to consider it one for the purpose of asking a 

147 



148 PAN AMERICAN FINANCIAL CONFERENCE. 

vote on this cablegram, and I would suggest that we vote by rising. 
Those in favor of sending this message will rise. 

(The Conference unanimously rose.) 

Secretary McAdoo. As I observe that there are none opposed, 1 
declare that it is unanimously adopted, and the cablegram will be 
sent. [Applause.] 

Dr. Eicardo C. Aldao (Argentina). Mr. Chairman and gentlemen, 
I am extremely sorry not to command, as I would like, the English 
language, in order that I might avail myself of this opportunity to 
express all of the feelings of my heart and also to express the sym- 
pathy of Argentina, both of the people and of the Government in 
this matter — a splendid proof of American solidarity. I can simply 
say I am confident that all of the people of Argentina fully ap- 
preciate and are grateful for the message which has been read. Mr. 
Chairman, please accept the heartfelt feeling of the Argentine 
people. Thanks ; many thanks. [Applause.] 

DESIGNATION OF GENERAL COMMITTEES. 

Secretary McAdoo. Upon further consideration of the committee 
which was appointed yesterday to consider uniformity of laws and 
to make report as to what seems practicable in that direction as .a 
basis for further action, the suggestion was made to me last evening 
after adjournment by a number of gentlemen that the duties of that 
committee might very properly and with great advantage be made 
to include the question of the creation of an international commercial 
court for the settlement of differences that may arise between citi- 
zens of the different countries; I mean in the matter of trade dis- 
putes, etc. I have no time this morning, and I shall not weary you 
with an elaboration of the idea, but it is one that seems to me to 
possess great merit, and I wish to ask that committee if it will not 
take up that very important proposition. I think it could be done 
with advantage, and perhaps we could formulate some ideas here 
that would mean the germ of something very substantial and prac- 
ticable. I want to add to that committee Mr. Benjamin Strong, jr., 
of New York, and I should be very glad if Mr. Strong would serve. 

Dr. Pearson just before the adjournment yesterday made some 
suggestions about a committee, and I ask if he will be good enough 
to tell me this morning at greater length what his ideas are as to 
the countries he thinks should be included in that committee. Dr. 
Pearson, if you have thought it over and have any additional sug- 
gestions to make before we take action, I shall be happy to hear 
from you. 

Dr. Pearson (Argentina). Mr. Chairman, the idea in forming a 
committee was to include Central America, so very well served to-day 



PROCEEDINGS. 149 

by the different steamship lines, especially the United Fruit Com- 
pany. My chief object was in seeing if this company could not 
extend its service, with the help of the governments of the different 
countries, farther south. They have a very fine line of steamers. 
We came over from Colon to New York, and I think such an exten- 
sion would be very easy, knowing as I do that all the governments 
of South America are anxious to come to a favorable understanding 
with respect to the matter. 

I think, as to the Pacific coast, Chile and Peru might represent 
that side of the continent, and on the Atlantic we can have Brazil, 
Uruguay, and the Argentine Eepublic, being the three most distant 
southern countries. 

I would suggest, if it meets the approval of the chairman, that the 
committee might be formed to represent those five South American 
countries, and, of course, any American citizen that you might 
indicate. 

Dr. Vergara Bulnes (Chile). Mr. Chairman, when I was invited 
by the Government of the United States to attend this Conference 
it was supposed that one of the most important points to be decided 
was the establishment of a fast steamship service from the far 
Chilean ports to ports of the United States. This was confirmed 
by the very well considered suggestion made by the Secretary of the 
Treasury to this Conference. So in the name of my colleagues of the 
Chilean delegation I may say that we will take the greatest pleasure 
in participating in the work of this committee, and we will be very 
glad to have that idea incorporated here. 

Secretary McAdoo. The Chair will be very happy to appoint such 
a committee, and I will ask the delegates from the five countries 
suggested, which seem to be most interested in the problem, whom 
they would like to have put upon that committee. I shall first ask 
the delegates from Argentina. 

Dr. Pearson (Argentina). Mr. Chairman, we of Argentina con- 
sider this matter one of the very important points to be treated by 
this Conference ; and we thought, as we were only going to be here a 
few days, that we would all like to form a part of this commission 
for the short time that we are to remain and then, as I do not think 
it would be possible to have a thorough understanding within a 
week, Mr. Zimmermann, who is one of the delegates from Argentina 
and who lives here, might continue to represent our country. If there 
is no objection, I would be glad to have that done. 

Secretary McAdoo. We quite agree. I do not know, Mr. Pearson, 
that with the work of these various group committees it will be pos- 
sible or practicable to work things out if every one of the delegates 
go on this committee. I suppose you can divide the work up in some 
way. I assume that, so far as Argentina is concerned, all of the 



150 PAN AMERICAN FINANCIAL CONFERENCE. 

members representing Argentina would serve. As to Chile, whom do 
you desire to have on the committee — the full delegation ? 

Dr. Vergara Btjlnes (Chile). Yes. 

Secretary McAdoo. And I assume the same with respect to Brazil ? 

Dr. Pearson (Argentina). There is only one delegate. 

Secretary McAdoo. Yes; but he is a whole regiment in himself. 
I assume the same for Peru. As to Uruguay, does the entire delega- 
tion wish to go on this committee ? 

Dr. Terra (Uruguay). In the memoranda presented by Uruguay 
to the Conference preference is given to a study for the facili- 
tation of commercial intercourse between the American nations 
by the development of shipping. The delegates of Uruguay have 
had the opportunity of realizing the difficulties which American 
countries meet in effecting closer relations. These delegates made a 
journey of a month. They had to cross the summits of the Andes. 
They encountered in their path every sort of difficulty, and they see 
well that we will never arrive at American solidarity such as we all 
desire, at that great commercial and intellectual solidarity, unless 
navigation be improved in every way possible. With that in view, 
this delegation has proposed to the Conference to diminish or to 
abolish all taxes on navigation, on beacons and lighthouses, and, if 
it is possible, the subvention of companies which would facilitate this 
commercial intercourse. Uruguay desires to participate in anything 
that may be done along these lines. That is all I had to say. [Ap- 
plause.] 

Dr. Cueva Garcia (Ecuador) . Mr. Chairman, I want to ask that 
Mr. Gonzales of our delegation be added to this special committee that 
has been suggested by Mr. Pearson. We are a small country, but 
we are large producers of agricultural products, and we are in 
the most horrible condition that any nation in America is. We 
realize, and it is a thing that you should know, that we have until a 
very few years ago, when the Peruvian Steamship Co. was estab- 
lished, paid $100 for first-class transportation from Guayaquil to 
Panama. That is 800 miles only, while you pay $70 or $75 from 
Panama to New York, and that is 2,000 miles. You pay $75 or $100 
for transportation from here to Europe, 3,000 miles. We have to 
pay even more than that for 800 miles. We have been paying $100. 
There is only one company, an English company, making our coast 
service. The rates for transportation of our crops are a real scan- 
dal, and this English company has taken advantage of this mo- 
ment to increase them still more. They have added £1 sterling on 
every 100 pounds of cocoa that we export. That is awful, and we do 
not know how to get out of it. If the Atlantic side is going to arrange 
something about steamship companies, that is all right. We are on the 
Pacific side and can not help that, but Peru and Chile are going on 



PROCEEDINGS. 151 

this committee, and I think we also should be represented. Argentina 
has some kind of transportation even up into Paraguay. Chile has 
a line. Peru has a line. We have none. We have cocoa; we have 
hats ; we have rubber ; we have coffee ; we are the producers of nearly 
all the fruit that goes to the Pacific side from Central America to 
the South Pole, and we have no way of transporting anything. 

Some years ago the Isthmian Canal Commission, while I was a 
resident commissioner in Panama, agreed with me to buy our prod- 
ucts, especially potatoes. We produce a very large quantity of these 
in the interior, and we could produce one hundred times the amount. 
They agreed to buy our potatoes at the same price they buy the Eng- 
lish potatoes, brought from England, 3,000 or 4,000 miles, while we 
were only 800 miles distant. The price of potatoes in Ecuador is 
practically nothing. We were, however, unable to put these potatoes 
in Panama at any price that would look like competition with the 
English exports, just on account of the lack of transportation facili- 
ties. 

We produce a very large quantity of oranges. These oranges are 
really worth nothing in Ecuador. The price is very small. We pay 
something like 20 cents for every 100 oranges. We wanted to send 
our oranges to Panama. We started to make a calculation. English 
oranges and San Francisco oranges and Florida oranges sold in Pan- 
ama at $4 for every thousand. We could not put our oranges from 
Guayas Eiver into the port of Balboa, the Canal Zone, for less than 
$10.50 per thousand. You must consider that if there is any country 
that is suffering on account of transportation we are that country, 
and we can not develop our exports. We can not increase our pro- 
duction. We have no way of getting it out. I therefore suggest, Mr. 
Chairman, that if you allow seven men to have part in this special 
committee on transportation, that Mr. Gonzales, of our delegation, 
be also appointed a member. I do not think one man more or less 
will make any difference. [Applause.] 

Secretary McAdoo. Gentlemen, as I conceive the purpose of Dr. 
Pearson's suggestion, it is that a committee shall be appointed simply 
to canvass the situation and report existing conditions, and suggest, 
if possible, any remedies, either by private capital or otherwise; 
that is, to survey the field in any way it can and report on it, and I 
assume there will be no objection to a representative of Ecuador 
being on that committee. I see that you assent to that, and I am very 
glad. 

I may say, further, that as to countries which are not represented, 
they can present to this committee any facts that may occur to them 
which they think bear upon their own particular situation. I know 
it is difficult to get a good working arrangement where committees 



152 PAN AMERICAN FINANCIAL CONFERENCE. 

are too large, and I would suggest, therefore, that the committee 
as suggested, of the six South American countries, be appointed; 
and they will be so appointed, and I shall appoint for the United 
States the following members: 

Hon. Edward N. Hurley, of the Federal Trade Commission ; Mr. 
E. Goodwin Ehett, of the United States Chamber of Commerce ; Mr. 
Paul Fuller, of New York; Mr. Franklin Q. Brown, of New York; 
Mr. George W. Norris, of Philadelphia; Mr. Harry A. Wheeler, of 
Chicago ; Mr. J. G. White, of New York. 

I think seven men will probably be a sufficient number to repre- 
sent the United States in these discussions, and I hope the com- 
mittee may be able to perform a useful service in discovering and 
presenting the real problem and suggesting all possible remedies for 
it, for the consideration of the people of the countries concerned. 

ORDER OF THE DAY. 

Now, gentlemen, we will proceed with the order of the day. I 
may say that after certain speeches that are to be made by members of 
the Federal Eeserve Board, who have been good enough to respond to 
the invitation, there will be opportunity for general discussion as 
before. 

After the close of this session the group conference committees 
will begin their work this afternoon. There, of course, will be other 
general sessions of the Conference, as indicated by the program, so 
that anyone who does not care to speak this morning will have an 
opportunity to do so later. 

I now have the honor and pleasure of introducing to you the gov- 
ernor of the Federal Eeserve Board. The question of finance, of 
course is an important one, and he has agreed to speak to you on the 
new act which has been passed by the Congress of this country, 
and which we think may be utilized for the benefit of our foreign 
commerce to a greater degree than ever before. 

ADDRESS OF HON. CHARLES S. HAMLIN, GOVERNOR OF THE 
FEDERAL RESERVE BOARD. 

Mr. Chairman and Gentlemen : 

This Conference of the sovereign nations of the Western Hemis- 
phere with the Secretary of the Treasury of the United States is an 
event of deep significance to the whole civilized world. 

If your deliberations are successful it will not only add to the 
prestige of the nations involved and to the distinction of the dele- 
gates, but, as well, it will add another achievement to the many 
already to the credit of the Secretary of the Treasury, and will place 



PBOCEEDINGS. 153 

another laurel wreath upon the brow of the President for his vic- 
tories in the cause of peace. 

The scope of your deliberations, necessarily limited to the subjects 
assigned for discussion, need have been limited only by the confines 
of human knowledge. When we consider the achievements of the 
nations whose representatives are gathered here we realize what a 
wealth it constitutes, for you could speak with authority upon the 
achievements of your citizens in the realms of science, philosophy, 
art, music, education, history, medicine, or international law, as well 
as upon the questions you have come together to discuss. That limi- 
tations necessarily had to be imposed upon your deliberations, thereby 
restricting them to the field of commerce, transportation, and finance, 
is perhaps, after all, an advantage, for to discuss the many important 
contributions to the world's advancement made by those nations 
would require such time that from the very nature of things it could 
not be given. 

I take it that the object of every government is to secure the 
greatest good of the greatest number of its people, and I believe the 
world realizes to-day that the prosperity of the people of one nation, 
in the long run, tends to the prosperity of those of other nations, 
while the adversity of one people must ultimately tend to the adver- 
sity of others. Just as the individual prospers best when his country 
prospers, so the nation prospers best out of the prosperity of all 
nations. [Applause.] 

In past centuries this great truth was not realized. On the con- 
trary, it was boldly advanced by thinkers and philosophers that each 
man is arrayed against his fellow man; that the gain of the one 
is the exact measure of the loss to the other; that competition be- 
tween individuals, whether in warfare or in commerce, must ulti- 
mately mean the destruction of the weaker and the gain of the 
stronger. So, also, it was believed that as between sovereign nations 
the precise measure of the gain to one from international trade was 
the measure of the loss to the other. 

Fortunately, however, such doctrines have not survived, and when 
occasionally they show their heads above the surface they are recog- 
nized as but temporary deviations from well-established rules of 
action. The world recognizes to-day that sympathy and cooperation 
are the most powerful factors in working out the social and indus- 
trial welfare of the individual, and that the same principles apply 
to the relations of one sovereign nation to another. 

Furthermore, the fact so cogently pointed out by Adam Smith, the 
great economist, that both nations gain by dealings in international 
trade is now accepted by all nations as a guiding principle, although, 
to be sure, many nations have somewhat obscured the principle by 



154 PAN AMERICAN FINANCIAL CONFERENCE. 

the levying of customs duties upon imports far above any possible 
need, either for revenue or for industrial development. 

It is also true that the nations to-day are beginning to recognize 
that they have products, whether of agriculture or manufacture, 
which they can create in such quantities that they are obliged to seek 
and obtain for them, or for a portion of them, foreign markets. 
They further realize that they must accept, in great measure, as pay- 
ment for their exported products, goods imported from these coun- 
tries purchasing their exports or from other countries for their 
account. In other words, speaking generally, every bale of goods 
exported from a country must be paid for by a bale of goods im- 
ported into the country. The actual payment may be made by the 
delivery of so-called " bills of exchange," but these bills of exchange, 
in a very large measure, are but symbols of property or are a claim 
for money based upon the sale of property. The merchant ships his 
goods abroad, but he sells the bill he draws upon the foreign pur- 
chaser to some domestic bank, and these bills, representing property, 
are used to offset similar bills drawn by foreign sellers against im- 
ports into the country. If the exports and imports of the country 
do not furnish bills of exchange enough to balance, then gold or its 
equivalent is used or, perhaps, loans, but these latter play a relatively 
minor part in international exchanges. 

It would be impossible for a country to shut itself off from other 
countries and still hope to continue its exports, receiving payment in 
gold instead of in goods. If we assume — what is impossible of real- 
ization — that any country could shut off its imports and continue to 
export, receiving gold for its exports, within a very few years it 
would cripple the exchange system of all foreign countries by the 
amount of gold it would take from them, but long before that point 
could be reached the importation of gold would so raise prices as to 
effectually stop its exports. 

Trade, as now generally recognized, means buying as well as sell- 
ing, and in so far as this conference has to do with trade and with 
the means and methods for increasing trade, it has to do with the in- 
crease of buying as well as with the increase of selling. 

We all recognize to-day the real interdependence of nations ; they 
are especially interdependent from the aspect of trade and commerce. 
The nation of large resources recognizes that in the long run it is for 
its own profit to strengthen this interdependence by furnishing the 
nation of smaller resources means to meet trade indebtedness to it. 
It should never be forgotten, however, that in the long run this in- 
debtedness must be met by the shipment of goods, whether from the 
debtor country or from some other country, for its account, to the 
creditor country. 



PROCEEDINGS. 155 

The question, "however, which must be foremost in your minds is 
just what the United States can do in assisting other nations to 
finance their trade movements, both with the United States and with 
the other nations of the world. As to the amount of capital at pres- 
ent available in the United States for such purposes and the work- 
ing out in detail of any specific plans or suggestions it is not my 
province to speak. I shall leave that field open to the delegates as- 
sembled here, and especially to my colleague, the Honorable Paul M. 
Warburg, who can speak with the authority of a master on every 
detail of international finance. [Applause.] 

The message which I wish to bring to you to-day, however, is that 
the United States was never before in such a position as it occupies 
to-day to reach out and extend its trade by granting credit to those 
nations who wish to be its customers. 

The dislocation of foreign trade caused by the present war fur- 
nishes the United States with a great opportunity, inasmuch as 
nations which for generations have had the relation of purchaser and 
seller now find these relations disrupted. 

The United States also has but recently placed itself upon a sound 
financial foundation by enacting a new banking system, which, to- 
gether with the reform laws already enacted, I believe will constitute 
one of the strongest systems in the world. [Applause.] 

Furthermore, the new system of banking inaugurated by the Fed- 
eral reserve act has provided an opportunity to our people of financ- 
ing our foreign trade. It has economized the use of credit and capi- 
tal. It has increased its efficiency, which will enable us, as I have 
said, to engage in financing trade movements with and between for- 
eign countries, which will do much to build up our international trade 
exchanges, particularly with the great nations whose representatives 
are here assembled. 

This leads naturally to consideration of the banking system which 
has lately been organized under the Federal reserve act. In order 
to understand the changes brought about by the new banking system 
we must briefly consider what the former system was, its defects, and 
how these defects have been remedied in the new system. 

Prior to November 16, 1914, when the new Federal reserve banks 
opened their doors, we had approximately 7,500 banks in the United 
States chartered by the National Government, and having the sole 
right to issue notes known as national-bank notes. The capital and 
surplus of these banks was a little under 2 billions of dollars, and 
taken in connection with their deposits represented a banking power 
of over 9 billions of dollars. There were also over 20,000 State banks, 
trust companies, and savings banks, chartered by the respective States, 
representing a capital and surplus of a little over 2 billions of dollars, 



156 PAN AMERICAN FINANCIAL CONFERENCE. 

and including deposits, representing a banking power of over 14 
billions of dollars. 

These banks, both. National and State, were independent and iso- 
lated, except as to a limited interdependence of some State institu- 
tions through stock ownership. They together constituted over 30,000 
individual units, between which in times of financial stress effective 
cooperation was impossible. 

Leaving out of consideration for the moment the State banks, 
there were in the United States over 7,500 independent units called 
national banks, each, as I before stated, having the power of note 
issue and each bound to keep in its vaults and with other national 
banks in certain cities, called reserve cities, a reserve fixed by law. 

Under the national-bank act, however, these reserves were, in effect, 
sealed up and could not lawfully be used, even in times of financial 
stress. A bank whose lawful reserve was below the legal limit was 
bound to restore it, and if it was not restored within a specified time 
the Comptroller of the Currency could place a receiver in the bank. 

The merchants and farmers of the country were often refused 
credit — the very essential of business life — and yet they could see 
these sealed-up reserves, ample for relief purposes, and yet denied 
them. They were in the position of a man weakened by hunger 
looking through a plate-glass window observing every kind of food 
which he is told is for his benefit, and yet no morsel of which can 
he under any circumstances be permitted to eat. 

As a result, in times of financial stringency, each bank had to pro- 
tect itself regardless of the condition of other banks, and had to 
fortify itself against its demand obligations by piling up reserves 
far above the prescribed limit. To do this it had to call loans or 
refuse to renew or make new loans during the stringency. The 
necessary result of this procedure was to make the stringency even 
more severe, and the hoarding of its resources by the individual 
banks quickly led to hoarding by individuals, thus throwing the 
whole banking system into confusion and ruining thousands of mer- 
chants who were unable to obtain the assistance to which under 
ordinary circumstances they would have been clearly entitled. 

During the latter part of the panic of 1907 it was found that 
some banks which by law need carry only 15 per cent reserves ware 
actually carrying reserves of between 40 and 50 per cent of their 
deposits, while in 1914 the reserves of some banks amounted to 70 
per cent. It is also a most significant fact that at the height of that 
panic over 200 millions of dollars in cash were being carried by the 
banks, in their vaults and with their reserve agents, in excess of 
their legal requirements. If these 200 millions of resources could 
have been used for the common benefit, such a panic would not have 
taken place. 



PROCEEDINGS. 157 

Under our old system the banks of the United States were in the 
position of an army entering into action as a disorganized body of 
individuals, without a single officer and without a single company, 
battalion, regiment, or brigade. That our oft-recurring panics under 
the old system did not involve more of our banks and their customers 
in general ruin is one of the wonders of financial science and is a 
great tribute to the marvelous recuperative powers and unrivaled 
resources of our people. 

Under our old financial system — or, rather, lack of system — every 
dollar loaned by a bank on commercial paper was a dead investment, 
as if buried in the ground, until the day of maturity. The paper, 
when discounted, was lowered into the vaults of the bank with almost 
funereal ceremony ; in fact, the national banks were but mausoleums 
for dead commercial paper, and if a bank president with ghoulish 
propensities were to open the vaults and try to dispose of any of 
the paper stored there, before its resurrection on the day of ma- 
turity, the act would have been looked upon with suspicion. As a 
result, when a bank had made all the loans it could its power to aid 
its customers absolutely ceased, and many a merchant of high stand- 
ing and good credit had to be refused further assistance, to his 
injury and possible disaster. 

Every bank had to arrange so that some of its resources should be 
invested in so-called liquid assets, so that in times of financial stress 
they could instantly realize upon these assets. As a result funds 
which otherwise might have been loaned to farmers and merchants 
were sent to the large financial centers of the country to be there 
invested in call loans upon stock exchange collateral — that is to say, 
upon bonds, stocks, and other securities which represented no com- 
mercial transactions, but which, in many cases, simply represented 
speculative activities. When, however, in times of stress these loans 
had to be called it was often found that what was considered to be a 
most liquid asset was, for the time being, no asset at all — as witness 
the period in the summer of 1914, when these so-called liquid assets 
were absolutely debarred from sale by the closing of the stock 
exchanges. 

Furthermore, under the old system the national banks issued so- 
called national-bank notes, which were originally designed to con- 
stitute an elastic currency, rising and falling in response to the de- 
mands of agriculture and commerce. Unfortunately, however, these 
notes had no such elasticity as was thus ascribed to them, because of 
the fact that their issue was not controlled by or based upon business 
development; on the contrary, these notes were indissolubly chained 
to Government bonds, which had to be pledged with the Government 
as collateral. These Government bonds were neither issued nor regu- 
lated by the expansion or contraction of trade and commerce. They 



158 PAN AMERICAN FINANCIAL CONFERENCE 

were fixed in amount and fluctuated in value in no fixed ratio to the 
development of those branches of business. As a fact, it was the fluc- 
tuation in value of these bonds which influenced the expansion or 
contraction of the national-bank notes rather than an expansion 
or contraction in business. When business slackened and contrac- 
tion of these notes was desirable, the notes responded but feebly, and 
in some cases actually increased in amount ; while, on the other hand, 
when expansion was desirable to accommodate increasing trade, the 
notes at times actually decreased; and at other times when they 
responded to the need for expansion the response was so belated as 
to take effect only when the necessity for the expansion had ceased. 

This alliance of national-bank notes with Government bonds was a 
strange one. The national-bank notes, supposed to be a measure of 
the development and expansion of trade, were linked to and gov- 
erned by the fluctuation in value of these bonds, which represented 
war, the destruction of trade, and the past dire necessities of the 
Government. Thus these national-bank notes, intended to represent 
the progress and development of trade and commerce of the twentieth 
century, were linked to the evidences of destruction of trade and 
commerce of the nineteenth century. There may have been a reason 
for this strange alliance in the nineteenth century owing to the neces- 
sity for finding a market for Government bonds, but in this twentieth 
century there is certainly no good reason for its continuance. 

Furthermore, under the old system the national banks were not 
able to finance our foreign trade, because under the law they could 
not lend their credit in the form of acceptances. As a result our 
foreign trade had to be financed in London and on the Continent, 
and the expression now so frequently heard — dollar acceptances — 
was merely an ideal as far removed from practical realization as the 
moon is distant from the earth. 

For example, we buy large quantities of raw and manufactured 
silk from the Orient. This silk goes direct to the Pacific ports of 
our country; it is taken overland by special train. The bill of ex- 
change, however, drawn for the selling price, is drawn upon a foreign 
bank and is sent, together with the bill of lading and other documents, 
east to London, or it may even pass through the United States on its 
way to the foreign bank upon which it is drawn, later to be returned 
to the United States for final discharge of the obligation of the pur- 
chasers in this country. 

The lack of cooperative union or confederation between the indi- 
vidual banks and their reserves also weakened the ability of the 
banks to conserve the supply of gold, the standard of value in the 
United States, and as a result the movement of the precious metals 
from the country, even when in strict accordance with the laws of 
trade and of ultimate advantage to the United States, was looked 



PROCEEDINGS. 159 

upon with anxiety as a symptom of financial trouble, causing uncer- 
tainty and lack of confidence. 

I have tried to show some of the defects which existed under our 
former system — the lack of cooperation between the individual banks, 
the lack of any system by which the reserves could be either used by 
the individual banks or consolidated into a common fund for the 
benefit of all the banks, the impossibility of rediscounting com- 
mercial paper once discounted by the banks, its lack of liquidity, 
and the consequent necessity for investment of part of the bank's 
assets in call loans as the most liquid investment possible, the lack 
of a genuine elastic currency, and, finally, the lack of power to 
finance our foreign trade through the loaning of credit by means of 
acceptances. 

The question naturally arises just how the Federal reserve act has 
remedied these conditions, placing the United States upon a firm 
banking foundation. I shall try to answer this question briefly. 

It should be clearly understood that the Federal reserve act does 
not add a dollar of money to existing stocks held by the banks or by 
the people, and also that, while it gives the national banks some 
valuable new powers and privileges, it does not change their inher- 
ent structure or their present charters. 

Just what, then, has the Federal reserve act accomplished ? While 
the act is a long one, containing much minute detail, its underlying 
principles are simplicity itself. 

In the first place, it divides the United States into 12 districts, each 
district containing approximately from 500 to TOO national banks. 
The national banks in each district unite in forming a new bank 
called the Federal reserve bank, to which each national bank contrib- 
utes 6 per cent of its paid-up capital stock and surplus to provide the 
necessary capital. 

The individual capital of these 12 Federal reserve banks varies, re- 
spectively, from a little under 5 millions to a little over 20 millions of 
dollars. The total capital of the 12 banks (not counting State insti- 
tutions which may ultimately become members) is a little over 100 
millions of dollars. 

At the present time only one-half of the capital payments have 
been called, and the total paid in by all the national banks amounts 
to a little over 50 millions of dollars. 

We thus have 12 Federal reserve banks with a total capital of over 
50 millions of dollars paid in and about as much more subject to call 
by the Federal Reserve Board when and if needed. This capital, 
under the terms of the Federal reserve act, has been paid in gold or 
gold certificates. 

The 12 Federal reserve districts vary greatly in area and in popula- 
tion. For example, the Federal reserve district of Chicago has a 



160 PAN AMERICAN FINANCIAL CONFEEENCE. 

population of over 12 millions of people, exceeding the combined 
populations of Norway, Sweden, and Switzerland. 

On the other hand, the area of the Federal reserve district of San 
Francisco (683,852 square miles) is so extensive that you could place 
within it England, Scotland, and Ireland, the whole of continental 
France, Italy, and Germany and still have left an area exceeding that 
of all the New England States combined, excepting only the State 
of Maine. 

In addition to the capital payments I have before mentioned, each 
national member bank is obliged to pay to its Federal reserve bank a 
certain portion of its legal reserve, which portion, however, it still 
counts as part of its reserve. These payments of reserves are spread 
over a period of three years, and the total payments will amount to 
over one-third of the total reserves held by the national member 
banks. 

Up to the present time about 295 millions of reserve money has 
been thus paid to the 12 Federal reserve banks, and at the end of 
three years over 400 millions will have been paid in, which latter 
amount will be, of course, greatly increased by the admission of 
State banks and trust companies. At that time all the reserves of the 
member banks must be held in their vaults or with the Federal re- 
serve bank, the privilege of keeping their reserves in part in approved 
banks in reserve cities ceasing at the end of that period. This will 
necessarily largely increase the amount of money deposited by the 
member banks in the Federal reserve banks. 

In addition the Secretary of the Treasury may deposit the gen- 
eral funds of the Treasury — excepting only certain trust funds — 
with the Federal reserve banks, and disbursements of the Government 
may be made by checks drawn against such deposits. 

The national banks in the 12 respective districts (and State 
banks which may join the system later) are the only stockholders 
of the Federal reserve banks, and their stock can not be transferred 
or hypothecated. The stock is entitled to a 6 per cent annual cumu- 
lative dividend, and one-half the net earnings of the Federal reserve 
banks may be paid into a surplus fund until it amounts to 40 per 
cent of the paid-up capital stock. 

All net earnings over and above this dividend and surplus are 
paid to the United States as a franchise tax. 

Each Federal reserve bank is managed by a board of directors, 
consisting of nine members, of which three are appointed by the Fed- 
eral Eeserve Board and six are elected by the member banks, three of 
the six directors representing the banks and three consisting of mem- 
bers who at the time of their election were actively engaged in com- 
merce, agriculture, or some other industrial pursuit. 



PROCEEDINGS. 161 

These twelve Federal reserve banks are under the control and 
direction of the Federal Eeserve Board, consisting of the Secretary 
of the Treasury and the Comptroller of the Currency, ex officio, and 
of five other members appointed by the President and confirmed by 
the Senate. 

The Federal Reserve Board sits in Washington, D. C. It appoints, 
as I before said, three directors on the board of each Federal reserve 
bank; it has general powers of supervision and examination of the 
Federal reserve banks and the member banks; it may suspend or 
remove, for cause, any director or officer of the Federal reserve banks ; 
it may suspend the operation of any Federal reserve bank and liq- 
uidate or reorganize such bank; it defines the paper which may be 
rediscounted by Federal reserve banks; it has power to review and 
determine the rates of discount established from time to time by 
the Federal reserve banks for the discount of commercial paper 
offered by the member banks; it regulates the open-market powers 
of the Federal reserve banks; it has power to suspend every reserve 
requirement of the act if it deems such course necessary ; and it has 
many other specific powers which I need not mention here. 

Each Federal reserve bank is independent of every other. They 
are empowered, however, with the permission of the Federal Eeserve 
Board, and at rates fixed by the board, to rediscount the discounted 
paper of any of the other Federal reserve banks, and can be required 
to do so by the affirmative vote of at least five members of the Fed- 
eral Eeserve Board. 

The act also creates a body known as the Federal Advisory Coun- 
cil, one member of which is elected by each Federal reserve bank. 
The duties of the council are to confer with the Federal Eeserve 
Board and to advise it as to matters connected with discount rates, 
note issues, reserve conditions, open-market powers, and similar 
questions. 

I have thus given a skeleton outline of the Federal reserve system. 
Many details I have had to omit for fear this address would take on 
the quality and length of a treatise or textbook. I think, however, 
that what I have outlined will give a fair understanding of the 
scope of the system. 

The question remains as to how the Federal reserve act remedies 
the defects which I have outlined as characteristic of the old system. 

The first fundamental defect of the old system pointed out by me 
was that each national bank was independent, and that as a result 
we had 7,500 independent banks and 7,500 scattered reserves, no 
effective cooperation being possible, nor could the individual reserves 
even be drawn upon legally by the very banks which owned them. 

98257°— 15 11 



162 PAN AMERICAN FINANCIAL CONFERENCE. 

This defect is remedied under the Federal reserve act through the 
capital and reserve deposits placed by each member bank with its 
reserve bank. These payments constitute a substantial fund — already 
about 350 millions of dollars, and constantly growing — which must 
be used by the Federal reserve banks for the benefit of the member 
banks and their customers — the people of the United States. 

These funds are held for use in discounting commercial paper 
offered by the banks for discounting acceptances and for certain open 
market investments which I shall not undertake to enumerate to-day. 
Any bank desiring funds can take its commercial paper to the Fed- 
eral reserve bank and obtain gold or lawful money in exchange. 
This privilege enables a bank to loan freely in times of commercial 
stress and to draw down its available resources far below what would 
have been considered prudent under the old system, for the commer- 
cial paper discounted by the banks under the new system is as good 
as gold, as it can be turned into cash or a cash credit at once at the 
Federal reserve bank upon request. This privilege also makes com- 
mercial paper a genuinely liquid investment, whereas under the old 
system such investments were absolutely dead until the day of ma- 
turity. Such commercial paper is far more liquid than a loan upon 
investment securities, for the loan upon commercial paper pre- 
sumably liquidates itself, as the borrower receives from the con- 
summation of the commercial transaction — to assist which the note 
was originally discounted — the money with which to pay it. 

It should, moreover, be pointed out that every dollar paid into the 
Federal reserve banks by the member banks — including all deposits 
made by the United States Government — is impressed with a trust, 
in that it must be used (excepting as to certain open-market invest- 
ments) only for the discount of paper issued or drawn for agricul- 
tural, industrial, or commercial purposes, whether in the domestic or 
foreign trade, and can never be invested in or loaned upon specula- 
tive securities or even upon real estate transactions. 

The second fundamental defect in the old system which I have 
pointed out was the lack of a really elastic currency. The Federal 
reserve act remedies this defect by providing for the gradual pay- 
ment and cancellation of the national-bank notes, and, further, by 
giving authority to the Federal Reserve Board to issue to Federal 
reserve banks applying therefor obligations of the United States 
known as Federal reserve notes. The bank obtaining such notes must 
deposit with one of the Government directors, known as the Federal 
reserve agent, as collateral commercial paper approved by the regu- 
lations of the Federal Reserve Board up to the face value of the notes 
thus issued, and in addition must maintain a gold reserve of 40 per 
cent against such notes. These notes will constitute a truly elastic cur- 
rency, rising and falling with the rising and falling of agriculture, 



PROCEEDINGS. 163 

trade, and commerce. No limit is imposed upon their issue. Such a 
note could conceivably be issued against every commercial or agricul- 
tural transaction represented by commercial paper which has been 
discounted by member banks. When, however, the commercial paper 
liquidates itself, and the maker uses the funds received from the 
transaction to pay off the note, the Federal reserve notes issued 
against that paper must be returned and canceled, or the amount of 
the notes thus paid must be retained by the Federal reserve agent 
against the Federal reserve notes until they are returned and can- 
celed. 

The Federal reserve notes will also serve to protect the gold supply 
of the United States, for much of it, sooner or later, will go into the 
vaults of the Federal reserve banks and Federal reserve notes will be 
issued in its place. 

The Federal reserve act also authorizes national banks, for the first 
time, to accept bills of exchange growing out of the import and ex- 
port trade under certain reasonable regulations, and the Federal re- 
serve banks are also authorized to discount such acceptances. This 
grant of power is a most valuable one and will enable our banks to 
finance our foreign trade by loaning their credit upon these accept- 
ances. By this grant of power the so-called " dollar acceptance " is 
made for the first time possible, and this means much for the future 
development of our trade, especially with the great nations of Cen- 
tral and South America, and will add much to our ability to assist 
them in financing their sales to and purchases from the United States. 

The Federal reserve act, however, has done much more to help 
make possible closer trade relations with foreign countries. The 
Federal Eeserve Board is given power to permit national banks to 
establish branches in foreign countries, and it is at once apparent 
what a great assistance this will be, not only to the United States 
but likewise to the great nations who are trading with the United 
States, especially those whose delegates are assembled here. Branches 
of national banks have already been authorized in Argentina, Brazil, 
Panama, and other countries, and it is confidently expected that a 
great development in our trade relations with such countries will 
result. [Applause.] 

The Federal Reserve Board is also authorized to permit the Federal 
reserve banks to open and maintain banking accounts, appoint corre- 
spondents, and establish agencies in foreign countries, for the purpose 
of purchasing and selling bills of exchange arising out of commercial 
transactions ; these banks are also authorized to deal in gold coin and 
bullion at home and abroad. It is easy to see what power the Federal 
Reserve Board, through the Federal reserve banks, will thereby have, 
in connection with its power over discount rates, over the movement 
of the precious metals into and from the United States. 



164 PAN AMERICAN FINANCIAL CONFERENCE. 

These great powers can and will be exercised in such a manner as 
to encourage and assist in every way the growth of the volume of 
trade between the United States and foreign countries. 

I think it will be realized, as I have before stated, that, growing 
out of this new banking act, the time has come for a marvelous de- 
velopment in our foreign trade, especially with South America, and 
that an opportunity is given to finance that trade such as has never 
been possible before. [Applause.] 

The resources of the Federal reserve system will also be greatly 
augmented in the future by the addition of large resources con- 
tributed by State banks and trust companies, which the act permits 
to join the Federal reserve system under reasonable regulations. I 
venture to express the hope that within the near future the majority 
of the strong State banks and trust companies doing a commercial 
business will join this system. 

The Federal reserve act economizes the use of capital ; it makes its 
use more effective than under the old system; by lowering the pre- 
scribed reserve requirements it has released hundreds of millions of 
capital which will provide additional credit; by its rediscount pro- 
visions and by the powers given to the Federal Eeserve Board to 
suspend reserve requirements in cases of necessity it has practically 
made a financial panic of the type we went through in 1907 an 
impossibility. 

The banks have been greatly strengthened by these reforms and 
have enlarged their power to grant discounts to their customers both 
in domestic and international trade. 

I believe the result will be of lasting advantage and benefit, not 
only to the people of the United States but to the people of all 
nations which engage in trade with us. 

I have tried briefly to outline just what the Federal reserve act has 
done for us, and to show how, incidentally, it may be of great advan- 
tage to all nations that trade with us. There remains only to con- 
sider the practical application of the principles of the act to the 
great problems of commerce, transportation, and finance which you 
are called together to consider, and these problems will be considered 
by you in conjunction with our own delegates, who are, it is needless 
to add, chosen men, representing the highest ability in practical 
banking, and who represent as well the highest type of our 
citizenship. 

I am sure that it will be the earnest prayer of all the people of 
our country, and of the great nations whose delegates are here 
assembled, that our deliberations shall be crowned with successful 
achievement. [Prolonged applause.] 



PROCEEDINGS. 165 

Secretary McAdoo. Gentlemen, I have now the honor of introduc- 
ing the Honorable Paul M. Warburg, another member of the Federal 
Eeserve Board, who will speak on the future financial course of 
American nations. [Applause.] 

ADDEESS OF HON. PAUL M. WARBUKG. 

Mr. Chairman and Gentlemen : 

It is a great honor to be permitted to speak before a conference in- 
cluding the eminent leaders of government, finance, and business of 
an entire continent. It must be confessed, however, that to address 
so distinguished an audience upon a topic as difficult as the future 
financial course of the nations of America is a task to be undertaken 
only with great diffidence and hesitation. 

We meet here deeply impressed by the unparalleled struggle which 
involves all the leading European nations and conscious of the fact 
that we are witnessing the beginning of one of the most important 
transformations in the world's history. 

We can not at this time forecast whether the outcome of this 
struggle will be a drastic revision of the world's map or whether 
national lines will remain substantially unchanged. But we already 
know that the economic consequences of this unhappy strife will be 
far-reaching and will vitally affect the future economic development 
of our own hemisphere. 

The object of this address is to attempt to crystallize some thoughts 
that must have come to us all who have stood in awe and amazement 
watching the sudden outburst and rapid spread of this disastrous 
conflagration across the Atlantic. 

Before presenting these thoughts to you, on behalf of the Federal 
Eeserve Board I beg to express the great satisfaction that my col- 
leagues and I feel at being afforded this opportunity of deliberating 
with you the problem confronting us all at this momentous turn in 
our history. 

WHENCE AND WHITHER ? 

THE FUTURE FINANCIAL COURSE OF AMERICAN NATIONS. 

In August, 1914, six European powers went to war. The anoma- 
lous consequence of this event was that all American nations were 
thrown into a condition of acute financial and commercial disturb- 
ance. 

Would it have been possible to avoid so disastrous an effect upon 
nations not directly involved in this struggle and thousands of miles 
removed from the fields of battle? And, furthermore, by what means 
may we hope to prevent, in the future, the recurrence of such fatal 
conditions ? 



166 PAN AMERICAN FINANCIAL CONFERENCE. 

These questions are deserving of the most serious consideration by 
this Conference. The problem affects us all. We have all, whether in 
the northern, central, or southern division of the Western Hemi- 
sphere, suffered together. It is of the most vital importance that, if 
at all possible, a proper remedy be found. 

Our sufferings originated in disturbances of three kinds — of ship- 
ping, of trade, and of credit. 

These three phases of our economic life are so closely interrelated 
that a breakdown of one immediately affects the other. A collapse 
of credit must interrupt trade and therefore shipping. On the other 
hand, disruption of shipping and trade necessarily disorganizes 
credit, crippling, as it does, the banking machinery which rests on 
the fulfillment of contracts, remittances, and payments based on com- 
mercial transactions. 

When in the face of untoward events actual experience affords a 
definite standard by which to judge cause and effect, it seems easy 
and often gratuitous for the critic to state what steps should have 
been taken. Retrospect is easier than forecast ! Still, it is only by 
such analysis that we may hope to avoid similar mistakes in the 
future. 

Eeviewing, then, last summer's events upon these assumptions, we 
may say that disruption of shipping, trade, and credit in the coun- 
tries of this hemisphere might have been less disastrous if, instead of 
relying exclusively upon Europe for their shipping and credit facili- 
ties, the American nations had begun in time to develop and organize 
their own large resources. 

It is not within the purview of this address to elaborate the most 
interesting and important question, What American nations might 
have done in the past or what they should do in the future in order 
to secure their own transportation facilities independent of those of 
others. Confining ourselves to the subject of credit and banking, we 
may say with confidence that had the United States enacted and put 
into operation three years ago its Federal reserve system, not only 
could our country have weathered the storm without such far-reach- 
ing disturbances, but we should have been in position to save our 
American sister republics much loss and inconvenience. 

In order to make this point clear it may be profitable to summarize 
briefly last year's events as now a chapter of the world's financial his- 
tory. When the war began England occupied a most advantageous 
strategic financial position. She had been acting as the banker of the 
entire world, particularly by her system of acceptance credits, thus 
financing a vast majority of transactions involving the importation 
and exportation of goods between nations. The Hindoo, the China- 
man, the Japanese, the Australian, the African from Cape Colony 
to Egypt, the Canadian, the South American, the citizen of the 



PROCEEDINGS. 167 

United States, and those of a large number of the European States, 
all had used the English credit market. 

But when the war broke out all countries were suddenly called 
upon to pay their debts and to finance their trade from that time 
forward wherever they could do it to their best advantage. The 
consequence of this situation was that England found herself in the 
position of a creditor calling upon the entire world for the payment 
of debts due at a time when shipping and trade were disorganized. 
It was therefore impossible within the short time granted for such 
payment to liquidate obligations by the shipment of merchandise, 
even though it had been previously sold under contract. At the 
same time a British debt to foreign countries was shielded by a 
moratorium, so that the foreigner who happened to be in debt to 
England, yet unable to collect there any sums due him, found him- 
self able to settle his own debts to that country only by buying ster- 
ling remittances at most exorbitant prices or by shipping actual 
gold. British stock exchanges had been closed, and even those for- 
eign debtors who owned British securities or securities which nor- 
mally found a market in England by the sale of which, therefore, 
they might have created balances with which to pay their debts, 
saw themselves debarred from using these assets for the liquidation 
of their obligations. 

Every country was thrown into confusion. Not one remained 
sufficiently undisturbed to be able to help the others. 

An English writer, now officially connected with the British ex- 
chequer, has written a very able and interesting book wherein he 
sums up the condition then created, as follows : 

London was so strong that it did not know how strong it was. Consequently, 
being a little flustered by the suddenness of the outbreak of the war, on a scale 
that mankind had never seen before, it made the mistake of asking its debtors 
to repay it, not the thousands of millions that it had lent in the form of perma- 
nent investment, but the comparatively trifling amount — perhaps one hundred 
and fifty or two hundred millions (pounds sterling) — that it had lent in the 
shape of bills of exchange drawn on it, and other forms of short credits. 
Thereby it put the rest of the economically civilized world, for the time being, 
into the bankruptcy court, and so, finding that none of its debtors could pay, it 
thought itself obliged to ask for time from its own creditors at home. 1 

It is not for us to criticize England for having acted in the prem- 
ises from a merely selfish point of view. This may well have been her 
duty. Her vital interests were at stake, and in view of the great 
catastrophe which she had to face it was necessary that she should 
muster from all parts of the world, not only her military, but also her 
financial reserves. Nor is much to be gained by insisting, with the 
British authority already cited, that some of the drastic measures 

1 Hartley Witters, " War and Lombard Street." 



168 PAN AMERICAN FINANCIAL CONFERENCE. 

which England found it necessary to take, and even her moratorium, 
might have been avoided if, immediately upon the beginning of the 
disturbance, she had been adequately prepared to issue without hesi- 
tation an ample supply of emergency currency. 

We must not blame England ; we must blame ourselves for having 
carelessly placed ourselves in this economically dangerous position. 

Without venturing to analyze the problems of other countries, we 
may say with reference to the United States that the responsibility 
for having been caught tied hand and foot when the crash came is in 
two respects our own. As already stated, we should several years ago 
have reorganized our financial system so as to keep our gold under our 
own effective control and so as to enable us to finance with our own 
resources our import and export transactions. We should, further- 
more, have avoided borrowing abroad when we could have financed 
our requirements at home, even though foreign aid was had at a 
slight advantage in rate. [Applause.] 

The chief lesson which all American nations will have to learn 
from last year's experience is that it is unwise for the world to 
place its financial dependence upon any single nation ; and that those 
who can afford to do so, as, for instance, the United States, should from 
this time on adopt a policy of greater reliance upon their own re- 
sources. Those countries which can not rely exclusively upon their 
own resources should adopt a policy of dividing the risks of financial 
dependence as evenly and widely as they possibly can. 

Financial dependence expresses itself in two ways: First, in the 
short-term credit granted to individuals; and, second, in the long- 
term and corporate credit, particularly that granted to Governments. 

Dealing first with the problem of individual credits, the United 
States may be profoundly grateful that just at this time its new 
banking system has been established. The day of the opening of 
our Federal reserve banks will mark the advent of our financial 
independence. We are now able to finance our own imports and 
exports by the use of American acceptances. More than that, we are 
in a position to finance the trade of other nations and to play, in this 
respect, the part of an international banker that has heretofore been 
played almost exclusively by England. While it is true that Ger- 
many and France, during the past generation, have begun to finance 
a large portion of their own trade by acceptances of their own banks, 
the bulk of the business has heretofore been handled by England. 
There is no doubt that, upon the establishment of peace, there will 
be a tendency on the part of many nations to emancipate themselves 
in this respect, and we may add, with profound conviction, that it is 
precisely in this field that the United States will be destined to play 
a most important role. 



PROCEEDINGS. 160 

We realize, of course, that it will be an arduous task to procure 
for our American acceptances the same standing in world markets as 
is now enjoyed by those of nations that have been in the field for 
generations past. Their commercial and financial relations are well 
established and bankers in foreign countries are more familiar with 
the names of European than of American acceptors. Moreover, the 
avenues that lead toward European establishments for the sale or 
discount of acceptances are clearly mapped out and at present of 
readier access than the neAV paths leading to those of the United 
States. It is difficult to change well-established banking habits. 
We are well aware, therefore, of the fact that it will be necessary for 
this country to render the utmost possible assistance in order to 
facilitate a development so eminently desirable for the future pro- 
tection of these large continents. This can be done in several ways: 

First, by the readiness of our banks and bankers to enter this new 
field in a spirit of liberality and patriotism. They must be thor- 
oughly imbued with the thought that it is necessary for the financial 
independence of their country and for the security of our American 
sister Eepublics that import and export transactions touching this 
country should in the future be financed by ourselves. [Applause.] 

It may be opportune to point out in this connection that the Fed- 
eral reserve act gives ample powers for the development of this busi- 
ness even though these powers may have to be still further enlarged. 
Member banks may accept and Federal reserve banks may dis- 
count bills arising out of transactions based upon the " importation 
or exportation" of goods. The Federal Eeserve Board has been 
advised by its counsel that the words "importation" and "exporta- 
tion," as used in this connection, need not be construed as confining 
these transactions to importations or exportations into or from the 
United States, but that these transactions may also cover shipments 
between foreign countries. We shall be in position, therefore, to 
serve as bankers for our American sister Eepublics, not only in their 
trade with us, but even in their trade with others. 

In order to develop this new avenue of American banking we need 
not even draw upon the means heretofore employed for the financing 
of our own problems. The United States^has a gold stock amounting 
to the phenomenal sum of about $1,890,000,000, of which so far only 
$300,000,000 in round figures have been concentrated in the Federal 
reserve banks. The Federal reserve banks need only continue the 
process just begun of substituting Federal reserve notes for the gold 
and gold certificates now in circulation, in order to gain control of a 
vast additional financial power which now lies idle. We may confi- 
dently expect, therefore, to find ample means to handle this business 
by the simple process of perfecting our organization and assembling 
our idle gold. 



170 PAN" AMERICAN FINANCIAL CONFERENCE. 

But in order to compete successfully in foreign markets -we must 
have not only banks and bankers of undoubted standing, able and 
willing to undertake these acceptance transactions, but also discount 
rates that compare favorably with those of competing nations. 

The fact that, within a few months, our banks have been able to 
accept in the aggregate an amount reported to be in excess of $120,- 
000,000 permits the conclusion that we have begun on a proper basis 
and with success. But the test will come when peace shall have been 
restored and when we shall have to make special efforts to maintain 
and strengthen our position. It will then be one of the functions 
of the Federal reserve banks to assist in the establishment of dis- 
count rates for these acceptances low enough to render them effective 
in securing business. 

There is one other signal service that Federal reserve banks can 
render in this respect ; that is, to facilitate the quotation of so-called 
" forward discount rates." A bank in a foreign country, when buy- 
ing a dollar acceptance, must be assured of the rate at which the bill 
will be discounted when it reaches our country. On this rate it will 
largely depend whether the foreign shipper will use his European or 
his American credit facilities. The Federal reserve banks are fully 
alive to the importance of this question, and I may state on behalf 
of some of the largest of these banks that they will be prepared to 
give the greatest possible assistance by adopting a liberal policy in 
quoting such forward discount rates, good for a certain date or for 
delivery upon the arrival of mail by a given steamer. 

The Federal Keserve Board and the Federal reserve banks have 
not yet reached any conclusions as to the most efficient method of 
fixing and transmitting these rates; whether they should be an- 
nounced locally only at the office of a Federal reserve bank or 
whether it would be helpful to cable them to the main banking cen- 
ters in foreign countries. It is hoped that both our guests and our 
bankers will consider the matter and give us the benefit of their 
suggestions. 

The Federal reserve act, for the first time since the establishment 
of our national banking system, enabled national banks to open 
branches in foreign countries. Important branches have already 
been opened and others are soon to follow. It is hoped that the law 
may be amended in the near future so as to still further facilitate 
the establishment of such branches. It is generally felt that these 
direct connections with foreign countries will tend toward the de-. 
velopment of better knowledge and understanding of local conditions 
and problems and the greater intimacy necessary for the develop- 
ment of cordial and mutually satisfactory business relations. 

The vast powers of the Federal reserve banks will enable them to 
play a most important part, and they will do all they can to assist 



PROCEEDINGS. 171 

in facilitating the growth of a truly American banking system rami- 
fying throughout our entire hemisphere. 

The policy thus outlined as applicable to individual transactions 
should also apply to corporate and Government financing. It is a 
source of weakness when a nation depends too largely on one single or 
several closely interrelated, foreign markets, no matter how attractive 
may be the terms upon which its obligations may be placed there. 
For, as experience has shown, such securities can be thrown back 
upon their makers at a time when it is least convenient. If, during a 
critical period, one single market or group of markets becomes un- 
available, while obligations of a debtor country mature or require- 
ments must imperatively be met, the debtor country finds itself in a 
most precarious condition. 

It is true that one country can not prevent another from buying 
its securities, nor would it be advisable hermetically to seal one stock 
exchange against securities quoted on another for fear that a closing 
of the one might otherwise force the closing of the other. The ad- 
vantage of free international interchange is such in peace that we 
must be willing to bear the disadvantages resulting therefrom in 
time of war. But every country, in order to be safe, must be pre- 
pared for such an eventuality. The financial structure of a country 
consists of three main parts — funded long-term securities and the 
organization for marketing them, viz, the stock exchange; indi- 
vidual short-term credits and the organization for marketing them, 
viz, the discount market and the deposit banks; and, finally, the note- 
issuing reserve banks. Every country must be prepared in grave 
emergencies to see the first of these three organs crippled and the 
stock exchange closed, but there must be such provision that the busi- 
ness of the country shall in that case be carried on by the other two 
units. In that respect last August found us still unprepared. The 
fact that our stock-exchange loans became unavailable crippled us. 
Our Federal Reserve System has since been opened, our organization 
is now established, and any future catastrophe will find us well 
equipped. 

There is no doubt, however, of the vulnerability of any country if 
too large a volume of its securities be held in one other country. 
It is certain that the United States will be in a safer condition if, in 
the future, when placing the securities to be issued for the develop- 
ment of our own properties, we rely to a larger extent than in the 
past upon our own markets. It is important to state this principle 
emphatically, even though for the next few years to come it be not 
likely that Europe could act as a large purchaser of our securities 
owing to the stupendous amount of bonds issued by the various Euro- 
pean Governments, the extraordinary inflation of currency existing 
in almost every part of Europe, and the appalling loss of property 



172 PAN AMERICAN FINANCIAL CONFERENCE. 

suffered by those countries. Indeed, it may well be expected that from 
now on the United States will not only have to rely largely upon its 
own resources for its internal development but that we shall be 
called upon to provide means for absorbing the securities previously 
placed in Europe but now returning to us. It is impossible to predict 
how far the death struggle now going on in Europe must proceed 
before an end is reached, and we can not, therefore, form any esti- 
mate of the extent of the destruction of property and prosperity. 
But even at this juncture it irsust be apparent to every student of the 
problem that borrowing nations will have to husband their resources 
and move slowly in the further development of their capacities until 
the power of some of these warring nations to save shall have recu- 
perated and European money shall again freely seek opportunities 
for investment abroad. Upon the degree to which destruction con- 
tinues will depend the role we eventually shall have to play, not only 
with respect to our own affairs but with respect to those of others. 
No doubt there will be a strong desire on the part of other countries, 
and particularly of the American nations, to ask of the bankers of 
the United States governmental and corporate credits. Some large 
foreign loans, aggregating more than $200,000,000, have been recently 
placed as a beginning. Our country will be prepared to render 
very substantial service in this respect. But we must bear in mind 
that in order to create a broad market for bonds of foreign nations 
it is not sufficient that our bankers alone be familiar with these 
countries. It is necessary that the investor, from his own knowledge, 
have confidence and a sympathetic understanding concerning the 
borrowing country's conditions. In other words, in order to open a 
wide market for foreign securities there must be intimate business 
relations with the countries which offer such securities for invest- 
ment. The belief is often expressed that foreign loans create for- 
eign business relations. This is true, but it can be said with equal 
force that foreign business relations are conducive to the conclusion 
of foreign loans. We may state with confidence that the United 
States will prove a strong market, growing in importance from year 
to year, for the loans of those foreign countries with which we enter- 
tain business relations. [Applause.] 

Europe has done much in developing the northern, the central, and 
the southern parts of this hemisphere. European banks and bankers 
have been our staunch and loyal friends in the past. It would be 
unbecoming in us, and disloyal at the same time, were we to forget 
this or to attempt to profit from their misfortunes. But our own 
growth and development, and the unhappy fate that has overcome 
Europe have combined to bring us to a momentous turning point in 
our economic history. Our own steadily increasing weight and 



PROCEEDINGS. 173 

Europe's relatively weakened condition mean that the New World 
must in the future lean less heavily on the Old. 

I think I am justified in saying that there is no difference of con- 
servative opinion that the United States does not aspire now to take 
the place of Europe's leading financial powers. Our own field of 
operation is still too vast to enable us or to render it even desirable for 
us to become the entire world's banker at this stage of our own 
development. But the safety of all countries — and we include Eng- 
land among their number — demands that if again the latter should 
find herself forced to call upon her debtors for instant payment, 
there should be at least one country strong and independent enough 
to shoulder a substantial portion of the burden. 

The development of all American nations lies in the same direc- 
tion, though there will be a difference in degree. It must be the 
aim of the United States from now on to move rapidly toward entire 
financial independence. It must be the aim of her sister republics 
so to divide the credits needed for their further development that the 
temporary breakdown of one creditor country will not seriously 
embarrass them. They will enjoy the greatest degree of safety in 
this respect if their creditor nations are geographically, politically, 
and economically separated from one another as far as possible. So 
that in case one should become involved the other may be expected 
to remain unaffected thereby. Though in normal times closely con- 
nected with Europe, the American continents ought to be so organ- 
ized as to form a distinct and independent unit in times of emer- 
gency — a union whose transportation and credit systems will remain 
unbroken, even though all Europe should go to war. 

An American union of this kind will prove of the greatest eco- 
nomic advantage for all nations concerned. If such a union be 
thought desirable, it must, however, be forged and riveted every day 
of the year. If it is to stand the test of time and stress, it must be a 
structure of gradual growth, carefully planned and consistently 
developed, and built upon a safe foundation. [Prolonged applause.] 

Secretary McAdoo. Gentlemen, I am now going to ask the Hon- 
orable Santiago Perez Triana to address you. 

Dr. Santiago Perez Triana (Colombia). Gentlemen, it may be 
thought that in my remarks I am perhaps going beyond the limits 
of the subjects prescribed by this Conference. I bespeak from you 
your forbearance and patience, and I think that many of you will 
agree with me that I am not shooting at random, but that there 
may be something — in fact, that there is something — in what I have 
to say that is of fundamental and essential importance in relation 
to the great aims of this Conference. 



174 PAN AMERICAN FINANCIAL CONFERENCE. 

This Conference has been called for the specific purpose of im- 
proving financial relations. I take it that that is a means — one of 
the many means — to a great end. The great end, taking it in a large 
way, is the welfare and the happiness of the peoples of this con- 
tinent. That happiness and welfare must be developed on the lines, 
socially, politically, and internationally, that have thus far been 
followed. We have achieved great success, and those lines are, as far 
as human vision can go, the true ones and the honest ones; there- 
fore, there is no reason why they should be changed. Those lines 
are crystallized in the words of seeking freedom through democracy. 
Inasmuch as there is no freedom without justice, that expresses it 
all. This Conference, therefore, is devoted to freedom and to de- 
mocracy, and every great effect to maintain that freedom, like this 
one, for the improvement of financial relationships comes under that 
head. 

At various times during the history of the continent since the 
beginning of the emancipation it has been found necessary to place 
on record utterances or to take steps tending to emphasize the fact 
that the continent is first and foremost devoted to democracy, and 
that no interference from outside, in any shape whatever, can or will 
be tolerated. 

That has created a status or a condition which may be defined as 
the inviolability of the continent. The fact of that inviolability has 
been strengthened by the development of American history; and by 
American, as I said yesterday, I mean the totality of the continent. 
That fact has been brought into glaring vividness by the present 
unhappy events that are taking place in Europe. The inviolability 
of the continent stands like a wall which a careful owner of an 
orchard would build around it — a wall to protect his -property from 
the encroachments of a wayward torrent in his neighborhood. When 
the torrent swells, it would seek to overflow, as torrents will, into 
the protected precincts, where it would find the protecting wall and 
would be diverted onward on its career. In this wise the inviolabil- 
ity of the American Continent is one of the determining factors of 
the present European war, for had the wall not existed the torrent 
would have been able to overflow and flood us. 

These things are not perhaps generally said and thought, or per- 
haps they are thought and not said. A very short recapitulation of 
European history, especially during the last forty or fifty years, made 
in no spirit of criticism particularly, but with the calmness with 
which one looks at a clock and finds that it is 12 o'clock, I think will 
prove my contention. The European powers constituted themselves 
into two great groups within the last twenty-five years. Those two 
great groups prided themselves on having maintained the peace of 
Europe during the period of forty years, since the Franco-Prussian 



PROCEEDINGS. 175 

War, and in a measure they did. The soil of Europe was not red- 
dened with blood during that period. But they evolved a sort of 
war in which men were not killed outright with weapons, but they 
were with taxes principally for the burden of armaments. The in- 
crease of rivalry amongst the powers made an escape necessary it 
was found in conquest of foreign lands. The groups stood as joint 
conquerors. Sometimes they conquered jointly and sometimes indi- 
vidually, but the fact is that by fire and sword or otherwise the 
totality of the lands of the Eastern Hemisphere that were in weak 
hands were conquered. They were first labeled, then parceled and 
distributed amongst the most-favored members of the two conquering 
groups. Their labors may have been for the good of humanity, or 
they may not have been. It is not for me to say, at least not to say 
here. Of course such things are always adduced as being for the 
good of humanity, for the higher interests of civilization, the white 
man's burden, and whatnot. Like many other common men I would 
be in a far better position to appreciate those claims when they served 
to carry on the propaganda of conquest by sword and fire and blood, 
if they had not happened to coincide every time with pecuniary 
advantages to those who put them forth. But things come to an end, 
and even an Eastern Hemisphere, as large as it was, had to come to 
an end. And it did come to an end. There was nothing more to be 
distributed. Then hands were potentially stretched out and eager 
eyes were cast around to see where there were more lands to conquer. 
Certainly there were more lands. There were vast, immense, bound- 
less plains and mountains and rivers and valleys ; all was there bask- 
ing in the sunshine, full of the promises of wealth and empty of 
humanity. But, alas, that mirage disappeared like a summer cloud 
in the sky, for there was that blessed inviolability that prevented such 
conquest. 

It is not drawing too much upon the imagination to suppose such 
a scene as this: A private, a very private, cabinet council at cne of 
the various monarchies in the presence of the respective monarch; 
the prime minister laying the burdens of his soul and of his nation 
before his august majesty; and then thus: 

Sire, we have reached the extreme limit of taxation and the people are 
almost in rebellion in our midst. We are running on to irredeemable poverty, 
and the surplus of our population is going to other and happier lands where 
men are not born with the burden of debts of one hundred or one hundred 
and fifty years ago (for all the European nations are still paying for the 
Napoleonic wars, amongst others), and thus men who go abroad, who repre- 
sent brain power and muscle and training, go to strengthen the political 
structure of our rivals of to-day and our enemies of to-morrow. A stop must 
be put to that. What is the remedy? We must have new lands and we must 
take them, conquer them where they are to be found, and we must follow the 
line of least resistance. We can not take them from the hands of powerful, 



176 PAN AMERICAN FINANCIAL CONFERENCE. 

crystallized monarchies like ourselves, but we can and must take the lands of 
the continent of America, which are only protected by a political convention 
and by a pretended inviolability, which is a sin in the eyes of God and man, 
because the lands are there empty and desert and our humanity is here, and 
God made the earth for men to work it, etc. 

Yesterday, sire, out of respect for that present convention, we were foolish 
to cut our throats mutually; that is to say, to go to war with the very same 
nations that stand in identically the same condition that we do. We should 
have united. There is room there in that part of the world to keep us going 
without wars amongst ourselves for a few hundred years. 

I may have drawn the picture in rather lively colors, but the 
essence of it is absolutely true. Rivalries amongst the nations that 
would thus talk have hindered and may hinder in the future any such 
proceedings. But it is not for us Americans to rely on these rivalries 
when we see how they have been put aside in the conquest of the 
Eastern Hemisphere. 

That brings me to this conclusion: The hour of watchfulness has 
only just begun for us now. The danger that I allude to does not 
lie in the perversity of individual men or in the perversity of col- 
lectivities ; it is the growth of circumstances — circumstances that are 
deeply rooted in the past centuries — and it will be indispensable for 
certain systems which constitute, as I might call them, the sediment of 
history in Europe to be eliminated and replaced by democracy in its 
fullest meaning before those circumstances disappear. And they 
will not disappear easily. They will die hard and die fighting. 
Therefore we Americans must be prepared to make the inviolability 
of our continent stronger each day. [Applause.] 

We have seen by this war what that inviolability means. "We have 
seen that we are immune from many evils, but that we can open our 
arms and our hands and help not only the nations of this continent 
but the nations of Europe, thus fulfilling a great mission. Those are 
sacred trusts which we must work out and develop, and develop to 
their fullest capacity. 

Now let us turn our eyes to our own continent. A house divided 
against itself soon falls. Ours is not a divided house. Yet, with 
reason or without reason, even amongst the members of a cordial, 
loving family, there may exist distrust. There are small darknesses 
in corners of the land. They may disappear or they may develop. 
Let us see that our harmony in this continent is diaphanous, trans- 
parent, and clear, without one shadow of doubt. The inviolability 
of the continent, which closed the era of conquest to outsiders, has 
not worked absolutely. I am not here to recapitulate or blame — far 
be it from me. Wherever redress is possible, redress should be accom- 
plished. Wherever in the historic development of the nations redress 
is not possible, we have to resign ourselves to the imperfections of 



PROCEEDINGS. 177 

humanity and let bygones be bygones and let the dead past bury its 
dead. [Applause.] 

Yet there is a shadow. I do not say that it is justified. I do 
not say that it is unjustified. I am not analyzing it in an elaborate 
way. But there is a shadow of distrust, which here is darker and 
there is hardly perceptible. Let us take that shadow of distrust 
away. What is the essence of the like of a nation ? Its sovereignty. 
What is the essence of sovereignty? Its integrity. Let the nations 
of this continent, all of them, in a formal and solemn manner, echo- 
ing words that have been pronounced in the history of this country 
by the chief of the executive power of this Nation not long ago, 
make it manifest that none of them covet the territory of the others 
and that they all consider that every man's home is sacred and 
every man's country is sacred, and that the borders of the respective 
nations shall be considered as sacred and never be conquered by 
force of arms. [Applause.] 

You gentlemen here represent the continents of America. I speak 
to you like a man who has thought a good deal on this subject. I 
consider myself in that light, and excuse this mention of my humble 
personality, as a good connecting link between the two great sections 
of the continent, the Latin and the English speaking. I came to this 
country so many years ago that I do not like to tell it. I have seen 
its institutions grow. I learned then, in my youth, the words of the 
great Americans which have shone in history with a great light. 
I love my continent and my section of it, and I love the poor 
of this continent more than the rich, because greater work lies before 
them. The more powerful a country may be the more is its duty to 
be generous and to decree solemnly that no other nation's territory 
shall be violated — that will tend to the peace cf the continent. And 
let it not be thought that I am referring to the strongest nation, 
for the microbe of imperialism very soon invades the organs. It is 
something very peculiar and it demonstrates how woefully embryonic 
is the development of mankind. Your honest man, your sincere man, 
your Christian man who will not take the ear of corn from his neigh- 
bor's field single handed, from the moment that he becomes numerous 
and acquires a collective conscience, not only takes the ear of corn 
but the field and the life of the neighbor to boot, and calls it con- 
quest ; then he presents himself as a hero of patriotism in a halo of 
glory for the admiration of future generations. [Applause.] 

From the highest summit of executive power it has been declared 
in this country recently that it should be honesty and not convenience 
that should guide the policy of nations. We should hold that prin- 
ciple aloft. That is the flag of right. We should hold that aloft 
as the flag of this continent, so that to the supposititious prime 
98257°— 15 12 



178 PAN AMERICAN FINANCIAL CONFERENCE. 

minister of the predatory monarchy we could reply : " Those lands, 
vast and rich and wonderfully potential for the welfare of humanity 
which you see and covet and demand because you say their posses- 
sion by us is a sin against God and man, are not in that position. 
They are open to you. All your people may come in their thousands, 
and in their millions, and we will not only give them a home, but we 
will crown them with the right of citizenship ; but this we tell you, 
you must come as peaceful multitudes, not as conquering clans. We 
have no place for your flags." [Applause.] 

That is the message which I have to deliver. I can not suggest 
the means now. I have not prepared that. I do not know — I can 
form no opinion — as to how this suggestion might be received, "and 
I have been in fear that it might not be thought proper, but I have 
said it. I bespeak your kindness, and I hope it will deserve and 
receive some attention. [Prolonged applause.] 

Secretary McAdoo. I now take great pleasure in calling upon Mr. 
A. Barton Hepburn, of New York. 

Mr. A. Barton Hepburn (New York) : 

Mr. Secretary and Gentlemen. — This is a great preparation for a 
very little speech. We have had the pleasure of meeting many — in- 
deed, most — of the delegates from the two Americas in New York on 
their way here, and have cultivated their acquaintance very en joy ably 
and to a considerable extent. The importance of those men and the 
importance of the occasion and the work of this Conference, however, 
grows upon one as its labors unfold. It is truly a crucial time in the 
history of our own Government and in the history of the world. In 
the United States any conference or any convention given its head will 
presently find itself, as the expression is, and the mere fact that the 
first hour of the session this morning was consumed in discussion of the 
subject of transportation or communication between our respective 
countries shows where the great interest of the continents lies and 
where it centers. That truly is fundamental, for we can have no 
financial connection or commercial connection unless we have some 
means of getting at each other, direct, facile, easy of accomplishment, 
to be done in commercial competition with routes of transportation 
existing between other countries. As long as we send our ambas- 
sadors to South America by way of Europe, as long as our commer- 
cial transactions with all that continent to the south of us are con- 
summated through the bankers of Europe, we can not hope to make 
much progress or to achieve very great success in reciprocal com- 
merce with those countries. In fact, in our United States we have 
suffered under three cardinal embarrassments in cultivating trade 
with other nations in the past. The great bulk of the commercial 
banking of this country was done by our " national banks." These 



PROCEEDINGS. 179 

were forbidden by law to do business anywhere except over the 
counter at the place named in their charters. They could not have 
branches or agencies either in this country or abroad. It followed 
inevitably that all the foreign trade of the country had to be financed 
by foreign bankers, by the bankers of the nations with whom we are 
seeking to compete. All this has now been done away with. The 
disadvantages of our former banking system as well as the advan- 
tages of the Federal reserve system, now so happily inaugurated, 
have been fully and fairly and most clearly set forth by Gov. 
Hamlin in his address to you to-day. We stand before the world 
to-day prepared to use the money power, the banking power of our 
own country, in the promotion of our own interests, in trade with 
other countries of the world — a position which we have never hereto- 
fore occupied. 

There was still another great handicap. During the years of 
wooden ships our forests gave this country a great advantage in ship- 
building, and 90 per cent of all our foreign commerce was carried 
under the American flag and in American bottoms. The Civil War 
interrupted that, it is true, but the change of the construction of ves- 
sels from wood to iron and later steel made the greater change, and 
that country which enjoyed a more advanced development in its iron 
and steel products — England — naturally absorbed the greater portion 
of the shipbuilding of the world. Until last year only nine per cent 
of our foreign commerce was carried under our own flag. 

Now, what does this mean? It means that in competition with 
England, France, Germany, and all the other commercial nations 
of the world cur goods had to be transported under their flags and 
in their vessels and pay the rate of transportation fixed by the men 
with whom we were seeking to compete. Until the last session of 
our Congress American registry was absolutely forbidden to foreign- 
built vessels. Prohibition is the limit of protection, and from the 
organization of the country until recently no commercial vessel built 
in a foreign land could be registered under the American flag and do 
business as an American vessel. Fortunately the rigors of that law 
were modified by the last Congress — very much modified. And yet 
they have not gone far enough. In my judgment, in order to facili- 
tate cur intercourse with other nations under the American flag, 
Congress must go still further in liberalizing the laws under which 
vessels may be manufactured and manned in this country. [Ap- 
plause.] As the law now stands, if we were to establish a line of 
vessels between this country and Argentina or Chile, it would be mo^e 
economical and more to the advantage of the stockholders in such 
corporation to have that company incorporated under the laws of 
Argentina or the laws of Chile than under the laws of the United 
States. [Applause.] 



180 PAN AMERICAN FINANCIAL CONFERENCE. 

But this present Government at the last session of Congress made 
many material — we might almost say radical — changes in our laws, 
and modifications in the right direction and to the advantage of the 
country. [Applause.] They made a tariff law which had a tendency 
to enlarge international communication. They have given us a very 
excellent banking law, which has the possibilities of working out 
into as good a commercial system and as good a banking system and 
currency system, I think, as any other nation possesses. I do not 
think it is quite perfect, but I have no doubt that under the adminis- 
tration of the men now in charge — and I want to say I do not think 
better selections could have been made throughout the country for 
the administration of this law (applause) — we may confidently rely 
upon the result. 

Speaking with reference to the Federal Reserve Board here in 
Washington, and to the boards of the twelve different reserve banks 
throughout the country, they are under the charge of good, com- 
petent, earnest, serious men, and I believe that we are going to have 
an excellent banking credit system, and that is what we have not 
had before. [Applause.] 

There is one other, the third of the great embarrassments under 
which we have labored as a nation in competing with other coun- 
tries, and that is that our people speak only one language — English. 
We are so far away from other nations that we do not have to know 
their languages, and we do not. Since our relations with Porto 
Rico and Cuba have become so much closer, this country is improving 
with respect to Spanish. But in competition with other nations in 
the past we have had to employ representatives of those nations to 
conduct our business. In other words, in order to expand our for- 
eign trade we have been obliged to call upon our competitors to 
finance our undertakings. We have had to depend upon them to 
transport our goods in competition with themselves and to rely upon 
these rivals to make our trades and do our thinking and do our busi- 
ness for us. [Applause.] Is it any wonder that only nine per cent of 
our commerce last year went under our own flag and in our own 
bottoms? 

Well, now, gentlemen, all this is being changed. Our colleges, our 
universities, throughout the country and in our large cities, and our 
commercial schools are making a special effort to introduce the 
mastery of French and German and Spanish — especially Spanish — 
in order that we may come more closely and more intelligently and 
more successfully into contact with our neighbors to the south. 

There is one further suggestion that I would like to make, and that 
is to express my gratitude for the privilege of sitting here and listen- 
ing to the speech of the gentleman who has just preceded me. [Ap- 
plause.] It was able and it was eloquent throughout, but to hear a 



PROCEEDINGS. 181 

man from another one of the Americas advancing the Monroe doc- 
trine, amplified and. enlarged to mean America for Americans, 
applied to both the Northern and Southern Americas, is very delight- 
ful and gratifying indeed. It means " hands off " to the rest of the 
world, so far as the establishment here is concerned of any form of 
government which would be a disturbing element. It means more 
than that. It means the getting together of our people with common 
sympathy and with common purpose. We want nothing of you 
gentlemen to the south of us except your good will and your good 
society and your cooperation in doing the business of the world which 
we all do and must do in order to achieve our own means to develop 
our happiness, comfort, and prosperity. [Applause.] 

Mr. Secretary, we owe you many things, but chief among them we 
wish to testify our appreciation of your foresight in calling this Con- 
ference of distinguished gentlemen at the present time. [Long ap- 
plause.] 

Secretary McAdoo. Gentlemen, before we adjourn there is one 
other gentleman whom I would like to call upon, and that is Mr. 
Mortimer Schiff, of New York. I would like him to talk a few 
moments about public financing, or governmental financing. Mr. 
Schiff, will you be kind enough to say a few words to the Conference 
upon that subject? Before Mr. Schiff begins his remarks I wish to 
say that certain of the delegates, as you will observe by reference to 
the program, are invited to luncheon with the Secretary of State at 
his house at one o'clock today. If these delegates will be good enough 
to resort to the Secretary's house upon the adjournment here — Mr. 
SchifF I am sure is net going to detain you very long — the Secretary 
will be happy to receive you. 

Mr. Mortimer L. S chief (New York) : 

Mr. Chairman and Gentlemen. — Great as is the privilege to ad- 
dress a gathering such as this and to participate in its deliberations, 
I have hesitated to accept the invitation of our distinguished Sec- 
retary of the Treasury to be one of the speakers, as there is so 
little of specific information and suggestion which I can contribute 
to the discussion. I welcome the opportunity, however, to become 
better acquainted with you gentlemen who represent our great 
sister Republics of the American Continent, and I hope that as 
a result of this Conference the business relations between our respec- 
tive countries may be greatly increased and solidified. I leave it 
to others, better qualified than I am, to propose methods and 
means through which this can best be accomplished, and shall 
restrict myself more particularly to describing the situation as it now 
seems to exist. Of one thing I can assure you, and that is that the 



182 PAN AMERICAN FINANCIAL CONFERENCE. 

interest of the United States in South and Central America is steadily 
growing and that our manufacturers, merchants, and bankers gener- 
ally will welcome every opportunity to extend our business relations 
with your countries. [Applause.] 

It must, however, be borne in mind from the start that we ourselves 
are not as yet under normal conditions a lending nation. We still 
need large amounts of capital for our own purposes, and a very con- 
siderable portion of our own securities are still held abroad, for 
which we must be prepared eventually to make payment, either by 
repurchasing them, or by meeting them when they mature. In 
addition, our investing public is still, in large measure, timid about 
investing money in foreign countries and prefers American securities 
to such an extent as at times to make the difference of return between, 
foreign and domestic securities of similar quality, offered in our 
market, seem almost absurd. The banker is, of course, dependent on 
his clients, the ultimate investors; and while he can do much by a 
proper presentation of facts to educate them, in the final instance he 
is forced to adopt their view and can successfully offer and place only 
securities which meet with their unqualified approval. 

International financing, from the standpoint of the banker, may be 
roughly subdivided into three-classes of investments or advances of 
credit : 

(1) Government loans, including those to States and municipali- 
ties; 

(2) Obligations and shares of transportation, industrial, and pub- 
lic service corporations; 

(3) Commercial credits and, generally, the financing of purchases 
and sales of goods and commodities. 

My own training and experience have been primarily along the 
lines of government and corporation finance, and I shall, therefore, 
discuss rather those features of the close relationship we hope to 
see brought about between the Latin- American countries and the 
United States. I shall not attempt to go into any detailed descrip- 
tion of the manner in which such financing should be done, as I 
assume that all of you are well informed as to this. I shall only 
try to point out some of the more important requisites necessary to 
make your securities suitable for our markets and in that connection 
call to your attention some of the difficulties with which bankers and 
issuing houses have to contend and some of the problems which they 
have to solve. 

Every country has its own methods of doing business, and our 
methods in the United States differ in some particulars from those 
to which you may have been accustomed in London, Paris, and 
Berlin. In several important particulars our method of distributing 
and handling securities is not the same as that in use in the countries 



PROCEEDINGS. 183 

of Europe, and this must be borne in mind in determining the type 
of security to be offered and the basis on which it is to be placed. 
I do not say that our methods are better than those of Europe, but 
they are different; and, as a result, a security, which under normal 
conditions might find a ready European market, might be very diffi- 
cult to deal with here. 

To take up, first, the matter of government finance, it is very im- 
portant that the investor should be assured that the borrowing coun- 
try is economically administered; that in its annual budget income 
and expenditures balance ; and that the proceeds of any loan wanted 
are to be used for productive purposes. From the point of view of 
the investor, dreadnaughts and rifles are not good security. It seems 
to me that a country should provide out of its own budget, through 
taxation of its own people or by internal loans provided by them, 
for all that might be called its nonproductive expenditures, and that 
it should restrict its foreign borrowing to such purposes — public 
works, railroads, irrigation, etc. — as may be self-supporting. In this 
connection, the policy recently adopted by our own great City of New 
York may be of interest. On September 19, 1914, the Board of 
Estimate and Apportionment of the City of New York passed the 
following resolution : 

" Whereas, the members of this board have contemplated the necessity of adopt- 
ing a new policy with regard to the financing of permanent public improve- 
ments, looking to the payment of the expense thereof in increasing propor- 
tions out of the budget of the city rather than through the issue of long-term 
bonds, and have already adopted such practice in part, which intent was fur- 
ther evidenced by the statement contained in the communication addressed 
by the Mayor to this Board in transmittal of the executive budget on August 
the 14th last ; and 

Whereas the present is an appropriate time for the further extension of this 
policy : now, therefore, be it 
Resolved, That the Board of Estimate and Apportionment hereby declares 

that it will pursue the following plan in financing public improvements : 

(1) The cost of all improvements of the revenue-producing class, such as 
rapid transit, docks, railway and water terminals, and water supply, shall be 
defrayed by the issue of 50-year corporate stock as heretofore. 

(2) The cost of all permanent improvements, other than those of the revenue- 
producing class, hereafter authorized by this Board, shall be financed as 
follows : 

(a) Those authorized subsequent to the passage of this resolution 
and during the year 1915 shall be paid for, three-quarters by the issue 
of 15-year corporate stock. The corporate stock so issued shall mature 
either in not more than 15 years, amortized as provided by law, or in 
equal annual installments, during a period of not more than 15 years. 
The remaining one-quarter of the cost of such improvements shall be 
paid through the medium of a one-year bond payable from the next 
annual tax budget. 

(&) Those authorized in the year 1916 shall be paid for, one-half by 
the issue of corporate stock maturing as aforesaid. The remaining 



184 PAN AMEBICAN FINANCIAL CONFERENCE. 

one-half of the cost of such improvements shall be paid through the 
medium of a one-year bond payable from the next annual tax budget. 

(c) Those authorized in the year 1917 shall be paid for, one-quarter 
by the issue of corporate stock as aforesaid. The remaining three- 
quarters of the cost of such improvements shall be paid through the 
medium of a one-year bond payable from the next annual tax budget. 

(d) The foregoing statements of policy contemplate the flnaDcing of 
improvements authorized during the year 1918 and subsequent years 
through the inclusion of the entire cost thereof in the annual budget 
of the city, excepting the revenue-producing improvements hereinbefore 
mentioned. 

(3) In so far as corporate stock notes issued by the City of New York as a 
part of the proposed loan of $100,000,000 shall be retired by issues of corporate 
stock, the corporate stock so issued shall mature as provided in clauses (a), 
(&) and (c) of paragraph 2 of these resolutions. 

(4) The cost of public works already authorized, whether under contract or 
not, but in respect of which new bonds are to be -issued, is to be financed in 
the same manner as above provided, with the exception of the cost of revenue- 
producing improvements hereinbefore mentioned. 

Nothing herein contained shall be deemed to affect either corporate stock or 
assessment bonds issued to replenish the street improvement fund or the 
fund for street and park openings." 

I have quoted these resolutions, which were adopted by. the muni- 
cipal authorities of New York City at the height of the stress and 
strain ensuing upon the outbreak of the European war, and which" 
even under those trying conditions were found entirely satisfactory 
by bankers and investors, not as embodying a hard-and-fast plan to 
be followed in every case, but as illustrating the general principles 
which it is desirable to adopt in government and municipal financing*, 
in order that investors may have the greatest sense of confidence in 
the investments of this kind they are invited to take. 

I would venture to suggest that in financing productive en- 
terprises in foreign countries, the most acceptable form of security 
is a bond, having a direct lien upon the enterprise itself and guaran- 
teed by indorsement by the government rather than a direct gov- 
ernment obligation. I well know the disinclination on the part of 
many governments to pledge specific security, but I firmly believe 
that by doing so and making the bonds to be issued primarily the 
obligation of the enterprise for whose purposes the proceeds are to 
be used the best results can be accomplished and the best market 
be secured. This is, of course, based on the proposition that govern- 
ments should be administered like large corporate enterprises in a 
businesslike manner, and that public works are undertaken, not for 
political purposes, but because they are needed by the country and 
will yield a proper return. 

Where, however, it is not feasible to issue such a guaranteed 
obligation and consequently a direct obligation of a government 
is, for one reason or another, the type of bond selected, a definite 



PKOCEEDINGS. 185 

pledge, for the service of the loan, of all or a portion of some 
definite form of governmental revenue will always prove of advan- 
tage. This may not always be necessary, but with countries still 
in course of development and dependent on foreign financial assist- 
ance, the investor seems to feel that he has the right to expect that 
some definite security be given. While at the start it may be neces- 
sary to do this in order to open markets and inspire confidence, if in 
the course of time the record of the borrower justifies it, the nor- 
mal course of development may permit the placing of loans not spe- 
cifically secured. Our public has never taken kindly to debentures 
or other unsecured obligations and has become accustomed to mort- 
gage security. If, therefore, it is desired to interest the American 
public in foreign securities, it is important that in every instance 
in which it is practicable mortgage security should be given. 

From this it follows that the laws in the foreign countries, in 
which the securities are domiciled, must be such as to give full pro- 
tection to the foreign lender, so that, in case of need, he can proceed 
without difficulty to foreclose upon the property on which he has a 
lien. Any difficulties in the laws in this respect will militate very 
much against the possibility of placing such securities in the United 
States. Loans to be placed in this country should also, if possible, 
bear a definite relation to trade with this country, and the proceeds 
should be used for such purposes as will best further this trade. 
Our investors will give a much more favorable reception to a loan, 
which they feel stimulates our trade, than to one issued for purely 
internal needs of the borrowing nation. 

Assuming that the general principles just stated are followed, the 
exact form of the obligation proposed to be offered to investors in 
this country is a matter which must be dealt with in each particular 
instance, and no general rule can be laid down as to this, since it 
depends almost exclusively upon conditions existing at the time of 
the negotiation of the loan. At certain times, a short-term note is 
the only feasible type ; while, at others, a long-time or a serial bond 
can be sold to good advantage. As a general proposition, however, 
it seems to me that short-term securities should be avoided, if it is at 
all practicable, even though by doing so the borrowing Government 
is obligated to what may seem to be a high rate of interest for a 
longer period of time. If financial conditions should change and 
money be procurable at materially lower rates, advantage can be 
taken of the redemption provision, which should be embodied in 
every long-time bond. As a matter of fact, however, experience has 
shown that, generally speaking, there is no economy in short-time 
borrowing — to say nothing of the danger involved for the borrower 
in running up a considerable debt with an early maturity. For the 



186 PAN AMERICAN FINANCIAL CONFERENCE. 

same reason, a sinking fund should also be provided, if in any way 
possible, in order to reduce the amount which must eventually be 
refinanced. 

It is, of course, of the greatest importance that such type of 
security be selected as the issuing houses can unqualifiedly endorse. 
On the other hand, the issuing houses must cooperate with the 
borrowing nation in making the security of such character as to 
render it certain that the latter can surely and punctually meet the 
engagements it undertakes. A security, even if successfully issued, 
whose terms are too onerous upon the borrower is not the proper 
one to offer to our public ; and if, as a result of such onerous terms, 
defaults should occur, the effect may be disastrous upon further 
placing of loans of the borrowing country in question and, indeed, 
of foreign loans in general. 

I am sure I need not touch upon the necessity for conforming 
strictly to the customs prevalent here as to the preparation of bonds, 
by which I mean the method of their engraving and the form in 
which they are drawn. Certain standards in respect to this have 
become very firmly established and it is important that they should 
be observed. 

There is one other matter about government finance to which I 
feel some delicacy in calling attention, but of which, as it is of such 
great importance, I shall venture to speak, hoping that I may not be 
misunderstood in so doing. It is the broad question of the stability 
and permanency of the government of the borrowing country. Un- 
less that is assured and our investing public feels confident that it 
will be maintained, it is hopeless to try to place the country's securi- 
ties in the United States. 

Small loans are likewise difficult to place, as the investor naturally 
dislikes purchasing a security forming part of only a small issue, since, 
in case he desires to realize upon his investment, ne knows he will 
find a very narrow market, if one at all. I therefore fear that for 
some time to come public issues of foreign securities in this country 
must be restricted to the larger issues of the more important coun- 
tries, although from time to time smaller amounts may possibly be 
dealt with in the form of Treasury bills or other short-time securities. 

One of the greatest difficulties in dealing with governments — and 
this holds true of every government, whether in South or Central 
America, or anywhere else — is the difficulty of making rapid nego- 
tiations and bringing them to a prompt conclusion. A corporation 
is usually in a position to make a prompt decision and thus take ad- 
vantage of the right moment to finance its needs, while, on the other 
hand, governments are usually slow to reach a decision and nego- 
tiations drag on. The result is that it often occurs that, by the time 



PKOCEEDINGS. 187 

the negotiation is completed, financial conditions have totally changed, 
and a business, which at its inception seemed feasible, is so no longer. 
It would facilitate matters very much, if when a negotiation for an 
important financial transaction is about to be undertaken, a pleni- 
potentiary could be empowered to deal with the bankers on the spot, 
rather than have the negotiations conducted by cable. According to 
my information, the Latin-American nations represented by you have 
very wisely in the past dealt more or less exclusively with certain 
definite bankers in the countries where their obligations have been 
placed, and have thus maintained a continuity of financial relations. 
It is very important for the maintenance of proper credit that this 
should be so. While in times of great ease of money and of large 
investment demand there may be a momentary advantage in obtain- 
ing competitive bidding, the practice does not pay in the long run, and 
experience has shown that, satisfactory relations having been estab- 
lished, the best results are achieved by continuing them. The great 
majority of the public looks to the issuing houses for guidance in the 
matter of its investments and expects them to see to it that all pos- 
sible safeguards are set up to protect the investor. No issuing house 
can properly perform this public duty, unless it has the unqualified 
confidence of the borrower, be it a government or a corporation ; and 
this mutual confidence can be secured only through more or less per- 
manent relations. 

With regard to corporate finance, as distinct from government 
finance, the same tests must be applied in judging the adaptability 
and availability of the securities of corporations for placing in this 
country, as if they had to do with the domestic enterprises of the 
United States. You of Latin America have, however, one great ad- 
vantage over us, and that is your system of definite concessions to 
private business enterprises for definite periods of time. Your Gov- 
ernments have thus assumed a contractual relationship with such 
business enterprises, by which the latter have been assured of undis- 
turbed possession of the rights granted them ; and, if I am not mis- 
taken, in many instances and particularly in railway enterprises, of 
minimum rates of compensation and of freedom from competition. 
Corporate enterprises of this character, properly established and suc- 
cessful in their activities, should in time find in this country a mar- 
ket for their securities. Enterprises in course of construction are 
always difficult to finance, even when they are located in our own 
country ; and this would of course be even more true of those located 
in foreign countries. For these, government aid by way of guaran- 
ties or otherwise, would probably be necessary in order to make their 
securities marketable here. 

In conclusion may I point out that it must not be assumed because 
a number of foreign loans have recently been placed here, that this 



188 PAN AMERICAN FINANCIAL CONFERENCE. 

country has suddenly become a world market for securities and is in 
a position wholly to replace the European markets, upon which you 
have heretofore, to a great extent, been dependent. It is true that, 
owing to the war and the great — though probably temporary — abun- 
dance of money, we have for the time being become the only open 
financial market, and that, as a result, it has been possible to place some 
foreign loans here. This has been, however, to a considerable extent 
forced placing, and the investor has had to be tempted by very high 
rates of interest. This has held true of European, as well as of 
South American loans. The better knowledge of the entire class of 
foreign securities is, however, steadily growing in the United States ; 
and I think we are justified in the expectation that in time we can 
build up a real clientele here for this type of loans. When once the 
investor is convinced of the safety of many forms of foreign obliga- 
tions, it should become feasible to place such loans here on their own 
merits and on a basis comparable to that upon which our own securi- 
ties of similar character are placed. This process can not be arti- 
ficially hastened ; but, if the normal development is allowed to take 
place, without too much pressure being brought to hurry it or to 
foster it on hastily devised and artificial lines, we may look forward 
with confidence to a sound growth of our investment market for for- 
eign and in particular for South American securities. 

Too much stress, however, can not be laid upon the truth that the 
only relationship between the countries of Latin America and the 
United States that can be lasting and satisfactory, is one which is 
based on mutual understanding and good will; and that, if such a 
relationship is once firmly established, the development of all our 
financial and commercial intercourse is bound to be along proper and 
permanently effective lines. On the other hand, just as the credit of 
a number of our own enterprises has been seriously damaged through 
mistakes of management, with a resultant effect on some of our do- 
mestic securities, so will irreparable damage be done to the possibil- 
ity of financing your requirements here, if great care be not taken in 
respect of the quality of the securities which are offered to American 
investors. It takes years of time and every manner of precaution to 
establish confidence ; but it may be destroyed in a moment. 

Investors in this country are still timid as to foreign investments 
and have not yet fully learned how to discriminate. They now rely 
to a great extent upon their confidence in the judgment and standing 
of the issuing houses that offer these investments. But finally the 
public itself learns to differentiate between the good and the bad, and 
it is only by a record of solvency and proper administration that its 
approval and interest can be permanently secured. In order to estab- 
lish this understanding and discernment on the part of our invest- 



PROCEEDINGS. . 189 

ing public, our respective countries must become better acquainted, 
and in this lies the great value of a conference like the present one. 
It is a direct indication to our people that both you and we are 
desirous to know each other better, and to enlarge and cement our 
relations with each other. Ours is the greatest hemisphere and we 
have few, if any, conflicting interests. Our aims and ideals are to a 
great extent the same ; and I, for one, feel confident that if together 
and in harmony we pursue these common aims and ideals steadfastly, 
we can mutually look forward to a future bright with promise. 
[Prolonged applause.] 

GENERAL ANNOUNCEMENTS. 

Secretary McAdoo. Gentlemen, I desire to make one or two an- 
nouncements. The next general session of the Conference will be 
on Thursday morning at 10 o'clock. That provides for group con- 
ferences this afternoon and all of to-morrow. On Thursday morn- 
ing we can take up any subjects which need further elucidation 
or discussion in general conference. I hope the group committees 
will devote themselves energetically to the matters they have before 
them. 

You will find on the program the designations of the rooms in the 
Shoreham Hotel for each of the group committees. I wish to say 
that the committee on uniformity of laws meets in this building this 
afternoon at 4 o'clock in the room just behind the platform, and I 
hope all of the members of that committee will, if possible, be in 
attendance. 

The transportation committee, appointed this morning, is requested 
to meet on Wednesday, that is to-morrow, at the Hotel Shoreham, 
in room 99, at 12 o'clock. Please do not forget that, and if any 
members of that committee are not present I hope those of you 
who have heard the announcement will communicate it to them. It 
will also be published in the newspapers. 

The Secretary-General has one or two matters that he desires to 
submit before we adjourn. 

The Secretary-General, Dr. Rowe. Gentlemen, I wish to ask the 
representatives from the United States to register to-day on their way 
out. It is especially important that we should have your addresses in 
Washington. We have not as yet been able to secure them all. I 
desire to ask therefore that the members from the United States 
register in the special book at the foot of the stairs. I may say also 
that this registering is very important because we have a great many 
letters to be distributed. Seme of them are here on the platform, and 
I will have the names read in order that those to whom they are 



190 PAN AMERICAN FINANCIAL CONFERENCE. 

addressed may get them. I also have two telegrams which I will 
deliver to the gentlemen to whom they are addressed. 

I wish to say that a new edition of the program will be completed 
to-day and will be distributed to-morrcw, containing all the group 
conference committees. I also desire to state that this afternoon 
you will have thirty galley proofs of the group conference committees 
which will be distributed in the committee rooms. 

Furthermore, I wish to announce that there will be an official 
photograph taken of all the members of the Conference immediately 
after adjournment to-day, if the members will remain. The photo- 
graph will be taken in front of the building. 

Secretary McAnoo. The Conference will now adjourn until Thurs- 
day morning. 

(Accordingly, at 1.10 p. m., the Conference adjourned until Thurs- 
day, May 27, 1915, at 10 o'clock a. m.) 



FOURTH SESSION 



THURSDAY MORNING, MAY 27, 1915 



191 



FOURTH SESSION, THURSDAY MORNING, MAY 27. 



The Conference was called to order at 10 a. m. 

Secretary McAdoo. Gentlemen, I wish to offer you greetings and 
to congratulate you upon the beautiful weather we are having 
in Washington, and also to express the hope that you, individually 
and collectively, are feeling well and capable of doing a great 
deal more work before this Conference adjourns. 

COMMITTEE APPOINTMENTS. 

I was handed yesterday afternoon the final edition of the program. 
There are a few errors in it. I wish to say that my attention was 
called after the announcement of the two large committees, made the 
other day, to the fact that on the Committee on Transportation 
neither the Mississippi Valley nor the city of New Orleans was 
represented. I took the liberty of appointing during the recess 
Mr. Sol Wexler, of New Orleans, and Hon. David K. Francis, 
of St. Louis, to this committee, and I announced the other morning 
that Mr. Benjamin R. Strong, jr., of New York, governor of the 
Federal reserve bank of that city, was appointed to membership on 
the Committee on Uniform Laws and International Trade Court. 
By error the program has him assigned to the Committee on Trans- 
portation. As the Transportation Committee already has quite a 
large representation from New York, I felt that Mr. Strong had 
better act in the other capacity, and I want to correct that error in 
the program. 

CONGRATULATORY TELEGRAMS RECEIVED. 

We have a cablegram this morning from the President of Argen- 
tina which I shall ask the Secretary-General to read to the Con- 
ference. 

The Secretary-General, Dr. Rowe : 

Buenos Aikes, May 26. 
Chateman of the Pan Amekican Financial Conference, 

Washington, D. C: 
On behalf of the Government and people of the Argentine Republic I beg 
to thank you most cordially for the congratulations which Your Excellency 

98257°— 15 13 193 



194 PAN AMEKICAN FINANCIAL CONFEKENCE. 

was good enough to send me in the name of the Pan American Financial Con- 
ference ; and I have great pleasure in offering to the Conference, through its very- 
worthy chairman, my sincere wishes for the success of its deliberations, confi- 
dent that they will be most beneficial in furthering the economic development 
of all the Republics of America and in establishing closer relations between 
them. 

VlCTORINO DE LA PLAZA, 

President Argentine Republic. 

[Applause.] 

The Secretary-General then read the following telegram from the 
National Association of Manufacturers, in session in New York : 

New York, May 26. 
Chairman of the Pan American Financial Conference, 

Washington, D. C: 
The National Association of Manufacturers of the United States of America 
in convention assembled extends to the delegates of the Pan American Financial 
Conference its heartiest greetings and expresses the hope that the Conference 
will result in increased cooperation between the countries of the Americas in 
matters of finance, commerce, and industry, and believes that its work will 
strongly influence the movement in favor of more direct interchange of products 
of Lktin America and of the United States, and pledges the active assistance 
of the association's widespread membership in looking after the welfare of the 
delegates in the cities which they will visit. 

The National Association of Manufacturers, 
George Copeland, President. 

(The telegram was translated into Spanish by the Secretary- 
General.) 

Secretary McAdoo. Before we begin the regular proceedings, I 
should like to make this announcement: The luncheon which is to 
be held here to-day is not a formal luncheon; I mean that no formal 
invitations have been issued. All the members of the Conference and 
their secretaries, of course, are cordially invited, and we hope that the 
representatives of the press will also come as our guests. I thought I 
had better make this announcement now, because I understand there 
seems to be some doubt about it. The door is open and the latch- 
string hangs on the outside, but if the door appears to be closed 
all you have to do is to pull the string and join in the good fellowship 
the occasion offers. I hope that every one of you will make it a 
point to be present, because after luncheon you will take the yacht 
Mayflower and go to Mount Yernon. Luncheon will be served in the 
room below this one. 

Gentlemen, I now have the honor of introducing to you the Honor- 
able Joseph E. Davies, who is chairman of the newly organized 
Federal Trade Commission and who has been kind enough to agree to 
address you on this occasion. [Applause.] 



PROCEEDINGS. . 195 

ADDRESS OF HON. JOSEPH E. DAVIES, CHAIRMAN OF THE 
FEDERAL TRADE COMMISSION. 

Members of the Pan American Financial Conference, Ladies 
and Gentlemen : 
This meeting of distinguished citizens of the Pan American Ee- 
publics is of epochal significance. It is held among international con- 
ditions of the most stupendous and momentous character that the 
world has ever experienced. For the Federal Trade Commission I 
am commissioned to say that it is desirous of doing all things, that in 
its powers lie, to further and extend the beneficent purposes and ef- 
fects of this great Conference. 

CONFERENCE DISTINCTIVE OF THE SPTRIT OF THE AMERICAS. 

It is distinctive of the genius of the Americas that the vision of 
one of the greatest Secretaries of the Treasury of the United States 
should have conceived this idea, and that the enlightened and pro- 
gressive statesmanship of eighteen republics should have grasped, sus- 
tained, and executed this altogether remarkable plan. This meeting, 
indeed, typifies both the ideal and practical quality of the genius of 
the American Republics. [Applause.] 

COUNCILS OF WAR AND COUNCILS OF PEACE. 

Across the seas, councils of the commanding brains of the nations 
of Europe are also engaged in great problems, pertaining to the 
mobilization of men and money for the purposes of war. This 
council of the Americas is held to marshal the great forces of peace 
into conditions that make for mutual helpfulness. The genius of 
Europe is addressed to war; the spirit of the Americas is turned 
toward peace. From the deliberations here there will come no 
colossal destruction of property, no horrible sacrifice of men, no 
anguishing hearts of women, no orphaning of children, no burdens 
of inferior race production and increased taxation for posterity. 
Your deliberations are fertile with the promise that greater argosies 
of peace and good will will sail the seas; that more factories will 
hum; that more men will be at work; that the standard of living 
may be raised; that more children may be educated; that more 
women may attend to their household cares singing with the con- 
tentment of peace as the days go by; and that the ideals of re- 
publican altruism may demonstrate to a world gone mad that the 
gospel of the Carpenter of Galilee is not a lie, but a living hope and 
beacon for the Republics of the Americas, in their contribution to 
the world and to its civilization. 



196 PAN AMERICAN FINANCIAL CONFERENCE. 

It is in keeping with the practicalities, judgment, and wisdom 
characteristic of the American financier, master of industry, and 
statesman, that this common council of the nations of this continent 
should be held at this crisis in international conditions. The Euro- 
pean war has altered and will alter the trade courses of the world. 
It has served to give us all pause, to analyze conditions that have 
been permitted to grow and to obtain, while we were secure in the 
confidence of peace, and lulled into indifference by temporary ad- 
vantage. This war has startled us into a realization of the direction 
in which we were drifting, and the courses of trade which the nations 
of this continent had permitted to develop. Problems have been thus 
rudely thrust upon us all alike. This upheaval of conditions over- 
night has brought similar consequences to the republics of this 
hemisphere. The dilemma of the cotton planters of the Southern 
States of this country was no more severe or typical than that which 
confronted the coffee planters of Brazil, the wheat growers of Ar- 
gentina, or the nitrate producers of Chile. The suspension of our 
boards of trade was duplicated in Santiago, Buenos Aires, and Rio 
de Janeiro. We were all in the same boat, afloat between the Atlan- 
tic and the Pacific. 

INTERDEPENDENCE OF AMERICAN REPUBLICS. 

In this situation we perforce look in upon ourselves. Such read- 
justments as are available we find are largely dependent upon our 
interrelations which exist and which may be developed. It is to the 
interest of each of us, nationally, to develop commercial and financial 
relations between ourselves. This is the underlying fact and problem 
which confronts this Conference. 

MUTUAL INTEREST IN PAN-AMERICAN TRADE. 

Trade, if it is to be permanent, must be based on mutual advantage. 
Ships must bring us the cocoa and hides of Bolivia, Venezuela, and 
Uruguay, the coffee, rubber, and ivory of Costa Rica, Guatemala, 
Nicaragua, and Panama, the fruit, potash, fibers, and meats of Co- 
lombia, of Honduras, Paraguay, Peru, and Salvador. You furnish 
these products and others equal and superior to similar products 
produced anywhere in the world. We need them ; you need our prod- 
ucts. If contracts are to be renewed and repeated, they must bring a 
profitable consideration to both parties. 

It is suggestive of great promise that the expressions from the 
nations here represented all contain the recognition of the fact that 
the permanency of our future relationships, and the profitableness of 
them to us all, must depend upon the degree not alone of mutual 



PROCEEDINGS. 197 

profit, but of mutual confidence which each nation has in the integ- 
rity of the motives of the others. Trade, like contracts between men, 
to develop and to grow, must be founded upon good faith between the 
parties. Trade thrives on profit, but profit flies when trade lacks 
confidence. 

MUTUAL CONFIDENCE DEMONSTRATED BY PAST FACTS. 

It is a matter of congratulation that in this situation professions 
of mutual confidence and integrity of motive are not limited to as- 
surances in the future, but are demonstrated by accomplishments in 
the past. As has been said by a distinguished statesman from South 
America in the course of this Conference, the attitude of the United 
States toward Cuba gave earnest of the spirit of the American people 
to all the world, of the integrity and sincerity of its altruistic pur- 
pose and object. The statement of the greatest proponent of peace in 
the world, the President of the United States, made at Mobile, Ala- 
bama, a year ago, bespoke the spirit of America in denying the desire 
of the United States to attain by conquest a fraction of land of this 
continent other than what it now possessed. The splendid service, 
the generous spirit, and the unanimity of action of Argentina, Brazil, 
and Chile in the Mexican mediation conference, all in the recent past, 
and the enactment of the peace treaties, give pledge of the sincerity 
and good faith in the common purposes and ends of the Republics 
of this continent in their dealings with each other. [Applause.] 

IDENTITY OF PRINCIPLES AUGURS PERMANENT RELATIONSHIPS. 

Underlying these facts and accomplishments cementing mutual 
confidence and respect there is a promise of permanency because of 
the identity of the principles underlying our governments. 

Fundamentally the common purpose of republican government 
gives assurance that in our development separately and in relation 
with one another we shall be guided by a common ideal and by a 
similar purpose, object, and end. The problems of trade will be 
attacked with identical conceptions of what constitutes the proper 
attitude of government toward industry and trade and of what con- 
stitutes justice and fairness to all men in the avenues of trade. 

The development of the future will be financial and industrial. 
In both of these there is possibility of friction between nations. 

INTERNATIONAL MONOPOLY AND UNFAIR COMPETITION. 

Great industrial developments are imminent in the different nations 
of this hemisphere. They will and should be fostered. But it is 
fortunate that in the Republics represented in this Conference there 



198 PAN AMERICAN FINANCIAL CONFERENCE. 

is identity of attitude as to the relation of government to industry 
and to its citizens, It has been instinctive to democracy to recognize 
that monopolistic private development in the negation of democracy ; 
that industrial private monopoly is industrial tyranny; that pro- 
fession of political freedom is hypocrisy unless freedom of individual 
opportunity through government is preserved. Every Republic of 
this hemisphere holds private monopoly to be indefensible and in- 
tolerable and antagonistic to the spirit of republican conceptions of 
government. It is fortunate that this common point of view is 
grounded on the very foundations of our political philosophy, for 
in the great developments that are at hand " enlightened selfishness " 
must control mammoth developments of power, which may become 
greater than the states or nations of their creation. Monopoly of an 
international character is not a fear of the future. It is a fact of 
the present. Unfair methods of competition to destroy rivals are not 
confined to local monopoly, but may be participated in by nations as 
well. There is no logical or ethical distinction between governments 
and individuals or corporations if engaged in such practices. They 
are equally intolerable. A common policy locally applied by the 
American nations gives promise of the development of a policy 
in common internationally applied for the mutual protection of 
all. Last May, in Paris, at the convention of the chambers of 
commerce of the world, it is to be noted that one of the most im- 
portant committees appointed, upon which were placed representa- 
tives from all of the industrial nations of the world there repre- 
sented, was a committee to formulate a code as to what constituted 
unfair competition in international commerce, which code should be 
sustained by the enlightened public opinion of all the industrial 
nations. The International Union for the Protection of Industrial 
Property, to which there are twenty-two signatures of the nations 
of the world, and which expressly provides for the elimination of 
unfair competition, indicates the necessity for such development. 
But three of the nations here in conference were signatories thereto. 

A PAN AMERICAN INTERNATIONAL TRIBUNAL. 

The fact that the Republics of this hemisphere founded their pol- 
icies with reference to industrial monopoly and industrial freedom 
of opportunity upon a common political philosophy augurs well for 
the development of a Pan American international code of what shall 
constitute fairness in trade. Such a code, if sustained by the nations 
and peoples of the Western Hemisphere, might be interpreted and 
executed by a Pan American tribunal, and the united judgment of 
the Eepublics thus expressed would sustain and enforce its decrees 
by the weight of an enlightened and common public opinion. Thus 



PROCEEDINGS. 199 

through the instrumentalities of trade and commerce would another 
step toward the elimination of war and the perpetuation of peace be 
effected. The seed for this hope may be found in the Pan American 
Union and the identity of aspiration and policy of the Republics of 
this hemisphere. 

DOLLAR EXCHANGE AND DOLLAR DIPLOMACY. 

No less in the financial developments arising from international 
relations is there promise of permanent connections through the estab- 
lishment of dollar exchange. Dollar exchange differs from dollar 
diplomacy. The idea of doliar exchange contains no suggestion of 
diplomatic differences or conflict of interests which might en- 
gender distrust and strained relations between the governments 
involved. Dollar exchange gives no special governmental support 
to private interests. It rather has to do with the great multitude 
of citizens engaged in dealing with each other in different parts 
of this hemisphere and is designed to serve and aid them to their 
common benefit. Dollar exchange does not seek an advantage over 
a contested situation. It serves as a medium for the more facile 
exchange of commodities to the advantage of both parties thereto. 
It incurs no risk of imposition by a stronger state upon a weaker 
by reason of a mistake or a misuse of power. Commercial advantage 
for the benefit of all, not service to the advantage of the few, is the 
end and purpose of government participation in dollar exchange. 

THE MISSION OF THE REPUBLICS OF THE AMERICAS. 

In conclusion, will you permit me to say that the nations here rep- 
resented are the exponents of a great ideal, one of the greatest ideals 
in the world; an ideal which has inspired every thinker, teacher, or 
benefactor of civilization ; an ideal which has moved men and nations 
to splendid and noble deeds and accomplishments — the ideal of 
altruism. Eepublican self-government is the essence of altruistic 
conception. Democracy, the government for the common man, is 
the translation of the Sermon on the Mount into terms of national 
entity. And in the chaos of world ideals that has upset the course 
of civilization within the past year, it is the mission of the repub- 
lics of the earth to place upon their thresholds and bind as frontlets 
upon their brows those fundamental principles on which the fathers 
founded these nations and by reason of which these nations have en- 
dured and brought blessings and peace to their citizens and to us. 

We arc of different races and tongues and creeds, but we have this 
heritage in common: Our ancestors all had the virtue and vigor of 
the pioneer. They sought betterment for themselves and their 
children. They came to a new country; they dreamed dreams, arid 



200 PAN AMEEICAN FINANCIAL CONFERENCE. 

endured hardships for the sake of their dreams. They dedicated 
the best years of their manhood and all of their interests to create, 
serve, and perpetuate a government that should be dedicated to the 
common good of all men. This service they have rendered to their 
country and to us, their children. We therefore have in common the 
hopes and aspirations of our fathers. We have in common bequeathed 
to us those ideals which Bolivar, Eosas, and San Martin, and the 
founders of this government fought for, and on which our govern- 
ments were founded. Our traditions, our purpose, our aspirations, 
all invite friendship, mutual trust, mutual helpfulness. 

Our hope suggests a probable common part in contributing to 
civilization the practical realization of that ultimate service of gov- 
ernment to society, which every teacher, prophet, seer, or saint has 
sought — the happiness of man. [Prolonged applause.] 

Secretary McAdoo. It seems almost superfluous for me to intro- 
duce the next speaker, who is so well known to all of you. However, 
I take great pleasure in introducing the Honorable John Barrett. 

ADDRESS OF HON. JOHN BARRETT, DIRECTOR GENERAL OF THE 
PAN AMERICAN UNION. 

Mr. Secretary, Delegates from Latin America, Members of the 
Conference, and Ladies : 

I would not be responding to the sentiment that wells up in my 
heart if I did not say to you, Mr. Secretary, that every man in this 
country who has been interested in the growth of practical Pan 
Americanism feels like extending to you sincere congratulations for 
having called together this notable assemblage, and I think I indulge 
in no exaggeration when I say that by this act you have enrolled 
yourselves among the great Pan Americans. [Applause.] 

As one who has attended many conferences, including some that 
have met in this building, I wish in passing also to compliment you 
on having such an efficient Pan American, such an interested Pan 
American, such an experienced Pan American, as your Secretary- 
General, Dr. Eowe. [Applause.] 

And as I have watched these men working out the details for this 
Conference and have seen the difficulties they have had to meet I 
want also to say that much credit is due to the cooperation that these 
gentlemen have had from the Assistant Secretary of the Treasury, 
Mr. Peters, and from the Secretary-General's Assistant Secretaries, 
Mr. Sands, Mr. Miles, Mr. Gittings, and Mr. Parker. [Applause.] 
I think it is only fair to them to say this; and I am in a position 
to make this reference where some others might hesitate, because I 
know how hard they have worked to make the Conference succeed. 



PROCEEDINGS. 201 

I think it is a most impressive thing — I say this particularly to 
the members of the Conference from the United States — one of the 
most impressive things that can possibly be in your minds in con- 
nection with the personnel of this Conference, namely, the class of 
men whom the governments of Latin America have sent to this Con- 
ference. [Applause.] Not to express any words of flattery, but 
simply to tell the truth, in the voice of one who has had to watch the 
history and the development of Latin America, I want to say that 
not one Government has sent other than its very first men to be par- 
ticipants in this Conference [applause], and you know what that 
means for the carrying out of the work of this gathering after it 
has adjourned and these various delegates have returned to their 
respective countries. I may say also to the delegates from Latin 
America that the men whom the Secretary of the Treasury has in- 
vited to meet you here are also the first men of our country in their 
respective occupations. [Applause.] 

May I now prove to you that I am not indulging in superfluous 
phrases in citing just a few facts? The Pan American Union, if any- 
thing, ought to be a barometer of Pan American feeling in Latin- 
America and in the United States ; and as I speak of the Pan Ameri- 
can Union, remember that I do not speak of it with any reference 
to the persons who are its officers or its staff, although I want to say 
it has a strong staff, which has always given me skilled assistance. 
But I speak more of it in the form of being the office of the govern- 
ing board, which is made up of the ambassadors and ministers of 
the Latin- American countries and the Secretary of State of the 
United States. The Pan American Union's policies and acts are 
entirely in their charge, and they deserve the credit for what has 
been accomplished. 

Now, please notice the following contrasts as proving to you that 
what I say about Pan America and Pan Americanism is no matter 
of imagination upon my part. Eight years ago, ladies and gentle- 
men, this organization owned not one penny of property and was 
housed in a little old house on Lafayette Square. To-day its build- 
ing, this palace of commerce and comity, and its grounds, represent 
an investment of $1,100,000. This building has been described by 
the greatest living French architect in an address which he delivered 
before the Sorbonne, in Paris, at a meeting presided over by Presi- 
dent Poincare, following a trip this architect made around the 
world, as combining for its cost, beauty of architecture, and useful- 
ness of purpose more than any other public building in the wide 
world. [Applause.] 

Eight years ago a staff of only twenty-five persons took care of all 
the work that this organization carried on. To-day there is a staff of 



202 PAN AMERICAN FINANCIAL CONFERENCE. 

seventy-five men and women, experts on every phase of international 
relationship. Eight years ago the total revenues of this organization 
were less than $50,000 a year, with the majority of the countries in 
arrears. Now the total revenue is approximately $145,000, with prac- 
tically no country in arrears. Mind you, moreover, that I am speak- 
ing of this organization as being twenty twenty-firsts Latin Ameri- 
can ! I want the representatives of the United States to take that 
into consideration as showing the significance of Pan Americanism, 
for it should give you encouragement for the work which is ahead of 
you. In this building is the Columbus Memorial Library, which eight 
years ago had less than 10,000 volumes. Now it has over 35,000 vol- 
umes, and the most practical collection of Americana to be found in 
the Western Hemisphere. To use that library there were, eight years 
ago, only about 10,000 cards. Now there are 150,000 cards, covering 
every country and every subject relating to them. Then we had a 
collection of only 500 photographs. Now there are 15,000 to 16,000 
photographs, showing every country and every city and every town 
and practically every section of the twenty countries which reach 
from the United States south to Argentina and Chile. 

Eight years ago this office distributed less than 80,000 pieces of 
printed matter in a year. This year the distribution will pass the 
mark of 800,000 ! I ask you, men of the United States, is not that a 
most practical evidence of the interest of the people of the world in 
these countries lying south of us, for not one of those pamphlets and 
reports has been sent out except in response to particular requests. 
In those days the Monthly Bulletin of the Pan American Union, the 
organ of the progress and development of Latin America, had no 
demand. Its distribution was practically nil. Now some 15,000 
copies are published each month, and it does not meet half the de- 
mand. It is published not alone in English, but in Spanish, in Portu- 
guese, and in French. It is a magazine which the German Emperor 
once said he regarded as the most interesting and instructive official 
publication in the world. 

I might go on and mention other facts like these, but I know this 
will interest the Latin American delegates: Eight years ago, when 
we investigated the universities and colleges of this country, we found 
only about nine or ten that had any regular courses in Spanish. Now, 
as a result largely of the efforts of this international organization, 
233 universities, colleges, and higher educational institutions have 
regular courses in the Spanish language. [Applause.] 

In the early part of 1907, in response to a circular letter which we 
sent out, we found only twenty-five high schools in the United States 
that gave any attention to the study of Spanish. Our recent record 
shows over 1,100 high schools in 1,100 different cities and towns of 



PROCEEDINGS. 203 

the United States taking up the study of the Spanish language upon 
the recommendation of the Pan American Union. [Applause.] 

In the year 1907 the members of the staff of the Pan American 
Union received twenty-one invitations from commercial organiza- 
tions, chambers of commerce, and societies throughout the country, to 
discuss Latin America. Last year, the year 1914, 889 invitations were 
received, covering every State and Territory of the United States, and 
some seven or eight foreign countries. One of our statisticians, who 
is a very clever man and who watches things closely, informs me that 
in the month of April the newspapers of the United States gave more 
space to Latin America in one month than they did in the three 
years of 1907, 1908, and 1909. [Applause. 1 ] He also informs me 
that the magazines of the United States had more articles in Janu- 
ary, February, and March on Latin America than in the five years 
from 1907 to 1912. Is there any better evidence of the growth of 
tangible Pan Americanism than that fact? A great book publisher 
told me the other day that more books relating to Latin America 
were published in 1914 than in the entire period from 1906 to 1910. 
These facts, I think, should be borne in mind, especially by the Latin- 
American delegates, that they may know the growth of interest in 
this part of the world regarding Latin America. And, correspond- 
ingly, I want to say that the number of inquiries which the Pan 
American Union received in the form of letters and telegrams from 
all over Latin America about the United States are 500 per cent 
greater than they were five years ago. That certainly shows a 
reciprocal attitude that is worth while. 

In the matter of trade in these years the total commerce of Latin 
America — that is, of these twenty countries from Cuba and Mexico 
south to Argentina and Chile — has grown from $1,800,000,000 to 
nearly $3,000,000,000, a tremendous increase of over a billion dollars 
in that period. 

And we find, if we take the commerce of the United States, that 
in that period the total value of the exchange of products between 
the United States and these twenty countries has increased from a 
little less than $500,000,000 to more than $800,000,000. 

Our records show that during the last seven years over 3,000 
men, firms, and companies have recorded themselves in this office 
as desiring information preparatory to doing business in Latin 
America, in contrast to less than 300 for the previous period of 
years before that. 

Now, honor bright, delegates of Latin America, honor bright, you 
men of the United States, is not this record of the last few years, 
not alone of the Pan American Union, no, but this record of the 
growth of interest both in Latin America and in the United States, a 



204 PAN AMERICAN FINANCIAL CONFERENCE. 

forceful reason for your believing that your efforts here are not by 
any means going to be in vain ? 

The position of this Pan American Financial Conference in Pan 
American history will be determined by its actual and practical 
results for Pan American commerce and comity. Let us, therefore, 
note some of the conditions surrounding its formation. 

This gathering is the inevitable climax of a great present-day 
Pan American movement, which is the natural and logical evolution 
of world conditions of the hour. The whole Western Hemisphere is 
in sympathy with it, and the entire world is watching it. 

Its results will not alone affect America but Europe and even 
Asia. It is not in any sense a movement antagonistic to the Old 
World, and yet the Old World is largely responsible for it. 

If there is a silver lining to the war cloud, it is the development of 
Pan American solidarity. No great historical event, since the dec- 
laration of the Monroe Doctrine in 1823, has done more to awaken 
the governments and peoples of both North and South America to a 
true appreciation of their common interests. Never before have the 
press and people of each and all of the American nations said so 
many sympathetic and kind things of each other as they are now 
doing. 

The measure of the success of this Conference will be the actual 
good it accomplishes for every Republic participating. Practical 
Pan Americanism should be its chief characteristic. Everybody is, 
therefore, desirous that it should initiate undertakings and propo- 
sitions that can and will be consummated. 

The Conference is marked by enthusiasm and hard work, but the 
real, absolute, and lasting test of its value will come in a year's time. 
What will have been positively achieved in May, 1916, as a direct 
result of this gathering will determine its position in the history of 
Pan American conferences. 

It is hoped, therefore, that the delegates, members, and friends 
of this Conference will not forget that this is only one of a remark- 
able chain of Pan American gatherings which have assembled in 
different capitals of the Western Hemisphere during the last twenty- 
five years. It would be unfortunate to overlook these other meetings 
in which all of the American governments participated with par- 
ticular interest and attention. It would be uncomplimentary to Latin 
America if we were to look upon this present Conference as a new 
departure. 

We should not, in our earnestness of this hour, forget to give credit 
to the nations and men who inspired and participated in the First 
Pan American Conference, which met in Washington during the 



PROCEEDINGS. 205 

winter of 1889-90 ; the Second Pan American Conference, which met 
at Mexico City during December and January of 1901-2 ; the Third 
Pan American Conference, which was in session at Kio de Janeiro, 
Brazil, through July, 1906; the Fourth Pan American Conference, 
which met at Buenos Aires during July and August, 1910 ; and also 
the Fifth Pan American Conference, which was to have met at 
Santiago, the capital of Chile, in December, 1914, and for which 
the Chilean Government had made elaborate preparations but which 
was postponed on account of the war. 

At all of these conferences, as the records clearly show, many of 
the principal questions of this present Conference — especially prob- 
lems of commerce and transportation — were minutely discussed and 
followed by the adoption of excellent resolutions. That practical 
results did not follow was not due to any lack of interest and action 
on the part of these conferences and the delegates themselves, but to 
the lack of interest and action on the part of some of the govern- 
ments after the conferences had adjourned. 

In this connection, moreover, let us not forget that this is not even 
the first Pan American Financial Conference, for, on January 7, 
1891, there assembled in Washington the International American 
Monetary Conference, which adjourned only after nearly four 
months' labor and study of the problems before it. There were also 
held the great Pan American Customs Conference and the Pan 
American Coffee Conference, which were in session for a consider- 
able period in New York City in October, 1902, and January, 1903, 
respectively. 

At all these notable gatherings most important action in. the form 
of resolutions was taken, but there the active interest ended. In the 
case of all of them there were widespread interest, splendid speeches, 
large attendance, and decided optimism, but when they adjourned 
there seemed to set in a tide of other interests or inaction which 
were fatal to great practical results. 

It would seem, therefore, to be proper for the members of this Con- 
ference — especially those who come from the United States and those 
to whom it is a new idea and to whom it appeals as a new oppor- 
tunity — to remember, with thought of those who have labored in the 
field before them, that it is only one in a long succession of great 
Pan American gatherings and that, if it is to be different from the 
others in the matter of actual achievement, they must keep up their 
work and interest after the Conference adjourns and not cease their 
endeavors until there has been practical confirmation of the under- 
takings which they initiate in the form of resolutions and recommen- 
dations. 



206 PAN AMERICAN FINANCIAL CONFERENCE. 

Fer this Conference to exercise the mighty influence hoped for by 
its friends it must be supported not merely by the superficial and pass- 
ing interest of the governments and peoples of the Western Hemi- 
sphere, but by their deep and abiding interest and cooperation, sup- 
ported by public sentiment. 

Let us hope, therefore, that this Conference may mark the begin- 
ning of a far-reaching Pan American movement among all the Re- 
publics of the Western Hemisphere, from the United States on the 
north to Argentina and Chile on the south. 

Let us hope that it may awaken the commercial, the civic and 
social societies, the universities and colleges, the rank and file of busi- 
ness men, and in general the people of every Eepublic to a realization 
of the meaning of Pan American solidarity and of the common inter- 
ests, purposes, and hopes of the Republics and peoples of the New 
World. 

If such an attitude of Pan American thought shall be the result of 
this Conference, its calling will be justified and applauded every- 
where throughout the Western Hemisphere. [Prolonged applause.] 

ANNOUNCEMENTS OF GENERAL COMMITTEE MEETINGS. 

The Secretary- General, Dr. Rowe: I should like to make one or 
two announcements with respect to the program. In the first place, 
I wish to inform the delegates and members of the Conference that 
their families are cordially invited to participate in the excursion 
this afternoon, and that it will be a very great help to the members 
of the party if they are here at 3 o'clock, in order that they may not 
be too long delayed in getting to the Navy Yard. 

Several delegates have requested me to inform the delegates from 
Central and South America to meet here for an informal conference 
immediately after the morning session to arrange for a subsequent 
meeting. I should also like to ask when the next meeting of the 
Committee on Transportation is to be held, if any member of that 
committee is present and can inform me ? 

Mr. J. G. White. At 9 o'clock to-morrow morning at the Shoreham 
Hotel, in the same room where the first meeting was held. 

The Secretary- General, Dr. Rowe. And the Committee on Uni- 
formity of Laws — has the time been fixed ? 

Mr. J. G. White. Yes, sir ; at 9 o'clock. 

Secretary McAdoo. At 9 o'clock to-morrow there will be another 
meeting of the Committee on Transportation, and also a meeting of 
the Committee on Uniformity of Laws. 



PROCEEDINGS. 207 

COMMITTEE ASSIGNMENTS. 

Gentlemen, there are a few representatives of this country who 
were not here when the committee assignments were made, and I will 
now assign them, as follows: 

Hon. John Hays Hammond, of New York, is assigned to the Com- 
mittee on Uniformity of Laws ; Hon. Robert W. Wool ley, Director of 
the Mint, to the same committee ; Mr. S. M. Hastings, of Chicago, to 
the Bolivian Committee; and Mr. E. T. Meredith, of Des Moines, 
Iowa, to the Colombian Committee. 

I see the Secretary of State is in the room, and I should be very 
happy if he would come and sit on the platform. We would like to 
have him very much. [Applause.] I would be glad also if the mem- 
bers of the Federal Reserve Board who are in the audience and 
members of the Federal Trade Commission will likewise come to the 
platform. [Applause.] 

MISCELLANEOUS BUSINESS. 

The names of five gentlemen who desire to say something to the 
Conference have been sent to the desk, and the first of those is one 
of our visiting delegates. We put no limitation of time upon his 
remarks. We desire delegates to have all the time they wish, but 
after the conclusion of their remarks the remainder of the time will 
be divided among the four representatives of the United States who 
desire to speak, and I will announce the apportionment as soon as I 
am able to do so. 

I shall now ask the Honorable Jose E. Suay, of Salvador, if he will 
please take the platform. [Applause.] 

Dr. Suay (Salvador) : 

After hearing all the wise observations and eloquent discourses of 
the distinguished delegates from the various countries, particularly 
that of Dr. Perez Triana, because it contains the highest ideas of 
pure Americanism, we should endeavor to extract from them the 
practical part and reach practical conclusions and immediate realiza- 
tion in the short time that remains. 

For this reason we beg to submit the following suggestions : 

Not being able to modify the work of several generations in a few 
days, it is our duty to commence the work and establish the primary 
bases, and for this reason we must examine the most urgent neces- 
sities. 

What is the principal object of this conference? The commercial 
expansion of the United States in Latin America, taking advantage 
of the situation created by the European war. All the rest is sub- 
sidiary. 



208 PAN AMERICAN FINANCIAL CONFERENCE. 

From the standpoint of the Latin countries the corollary of that 
premise should be : Given the situation created by the European war, 
and the mutual necessity of extending American commerce in the 
Latin Republics of the continent, to request of American finance the 
necessary elements for the development of our natural resources and 
of our national commerce; that is to say, to establish banks with 
American capital and by means of them to create larger and longer 
credits. Without banks the work would be deficient and would not 
give the desired results. 

Let us examine the immediate and practical means of extending 
American commerce in our Republics. 

In order to create or extend commerce, the essentials are — 

1. Markets. — We can furnish those in a territory of more than 
8,000,000 square miles, populated by more than 80,000,000 inhabitants, 
with customers from the Indian, who clothes himself with a shawl, 
to the rich man, who dresses as they dress in New York and uses an 
automobile. 

2. Good and cheap merchandise suitable to the customers. These 
are problems of manufacturing technique and internal commercial 
organization which must be settled by the merchant and the American 
manufacturer and in which the conference can not intervene. 

In regard to this, permit me to submit to the consideration of the 
conference the idea of recommending to the United States Govern- 
ment, through the honorable Secretary of the Treasury, that it send 
several commissions composed of merchants, brokers, manufacturers, 
and North American bankers to the different Central and South 
American countries, in order that they may study the different 
markets from a commercial and economic point of view. 

It is certain that our governments will receive them with enthusi- 
asm, endeavoring in a slight degree to reciprocate such a cordial re- 
ception and so many attentions that have been received by us from 
the Government, the authorities, and American people, since we first 
stepped upon the soil of this great and free country. 

3. Rapid, sure, and cheap transportation of select merchandise and 
natural products. 

4. Credit and favorable conditions in regard to payment. 

In our humble opinion the third and fourth points are those which 
it is expedient that the conference study and resolve. 

In regard to the third point, or that which refers to the means oi 
transportation, there must be found elements for establishing new 
lines or improving the existing ones, so that there may be lines which 
are speedy and with fixed sailing dates : 

{a) Between San Francisco and the extreme end of South Amer- 
ica on the Pacific. 



PROCEEDINGS. 209 

(b) Between San Francisco and New York by way of the canal. 

(c) Between San Francisco and the extreme end of South Amer- 
ica on the Atlantic. 

(d) Auxiliary lines to complete and aid the principal lines, as 
that from New York to Colon and from San Francisco to Panama, 
etc. 

All these lines should serve the intermediate ports, having at 
least one port in each country, and a direct or semidirect monthly 
service with the terminal ports to the north and south. 

The conference should recommend to all the interested Govern- 
ments : 

1. Absolute exemption of all port dues, tonnage dues, lighthouse 
dues, etc., including the tolls through the Panama Canal. 

2. Subsidies in favor of the steamship lines. 

In the budget of the Republic of Salvador there is a sum destined 
to this end, which could be increased if necessary. 

In regard to the fourth point, or that which refers to credit, it is 
essential that the conference study the means of establishing banks 
with sufficient American capital in each country. There are two all- 
important reasons which we shall outline "sine qua non": First, 
because in order to be able to give credit with the idea of facilitating 
commercial operations the American merchants and manufacturers 
need local agents who are in touch with the commercial standing of 
their customers; second, because in order to have good customers 
and to extend business it is important that each country be able to 
develop its natural resources and prosper. Latin America, like every 
new country, needs large amounts of capital which would insure its 
prosperity and transform it into a more productive customer, com- 
mercially and economically speaking. Thus the establishment of 
American banks is to the interest of both parties, for without them 
everything that may be done to the end of extending American 
commerce in our countries will not give the complete result which we 
all desire. 

In the memorandum which we had the honor to present to the 
secretary general on Monday last we spoke of other points, which 
are interesting but not essential, such as the adoption of the metric 
system in weights and measures as a uniform system for all the coun- 
tries represented in this conference, the establishment of a uniform 
postal rate, etc. 

Our memorandum also moves for the adoption of the American 
monetary standard, with American money as a uniform currency 
for all America. As this point is also of great importance, if it is 
thought worthy of study, its adoption would be a great step in the 
way of drawing the nations of the new world closer together. 

98257°— 15 14 



210 PAN AMERICAN FINANCIAL CONFERENCE. 

We conclude especially requesting the Hon. William McAdoo, 
Secretary of the Treasury, to use his valuable influence for the 
realization of the two principal points, viz, the establishment of new 
steamship lines and American banks in Central and South America. 
These two elements will be the essential factors in the extension of 
American commerce, and thus the brilliant success of this conference 
will be the best reward for the efforts of the Secretary of the 
Treasury. 

Secretary McAdoo. This Memorandum will be printed in English 
and distributed to the delegates as soon as possible. I should have 
the translation read now except that time is getting rather short. 

The Honorable Santiago Perez Triana, of Colombia, desires to say 
a few words. [Applause.] 

Dr. Perez Triana (Colombia). Mr. Secretary and gentlemen, cer- 
tain printed rumors have reached me that make it imperative for 
me to address you, but I shall not take more than thirty-three seconds 
and a half, I think. [Laughter.] 

In my remarks on the 25th I adhered strictly to general principles, 
and I distinctly said that in cases of error redress should take place 
whenever possible, but that whenever the development of history 
should have made redress impossible, then no hatred or rancor should 
exist, for it is both barren and pernicious; and hatred as a cult 
makes nations or individuals unfit for justice and incapable of great- 
ness. [Applause.] 

Secretary McAdoo. I have pleasure in introducing Mr. E. J. 
Fisher, of New York. 

Mr. E. J. Fisher (New York) : 

Mr. Secretary, Ladies, and Gentlemen. — In making a brief sug- 
gestion to the Conference, it is not my desire to invite discussion, but 
that it be referred to the proper general committee. 

I have summarized what seems to me to be a thing in some re- 
spects needed by the Conference. It is a plan for the organization 
of a Pan American Finance Commission. It is somewhat mechan- 
ical, if you will bear with me. 

The Pan American Finance Commission shall consist of seven mem- 
bers of recognized experience in banking or finance, who shall be 
appointed and subject to removal by the Board of Directors of the 
Pan American Union, and whose duty in general shall be to advise 
and assist in the solution of the fiscal and monetary problems of the 
various nations of the Pan American Union. Each member shall 
serve for ten years, unless removed for cause to be stated in a com- 
munication sent to the President of the country of which he is a citi- 



PROCEEDINGS. • 211 

zen. His successor shall be appointed in the manner herein provided 
and shall serve the balance of the term. The Commission shall ordi- 
narily sit and have its headquarters in the building of the Pan Amer- 
ican Union in Washington, but may give hearings and conduct in- 
vestigations in such cities of North and Scuth America as may be 
necessary in the conduct and development of its work. 

The Board of Directors of the Pan American Union, after consulta- 
tion with the Federal Reserve Board of the United States, shall out- 
line a tentative budget of annual expenses of the Commission, includ- 
ing provision for such salaries for its members as will command men 
of the class herein provided, compensation for the members of an 
expert staff, and for necessary traveling and office expenses. Each 
member of the Union assenting to the general plan shall agree to 
share in the aggregate annual expenses in such proportion and in 
such manner as it now shares expenses for the maintenance of the Pan 
American Union. The plan shall be effective and binding upon each 
assenting member for the period of ten years following the formal 
organization of the Commission. 

The Commission shall be organized upon the call of the Director 
General of the Pan American Union. The Commission shall formu- 
late its own by-laws and shall elect from its own membership a 
president and treasurer. Its accounts shall be audited at least annu- 
ally in such manner as may be provided by the Board of Directors 
of the Pan American Union. 

The specific duties of the Commission shall be as follows : 

(1) To advise and assist in the fiscal development of the various 
countries of the Pan American Union, securing data necessary and 
making suggestions in relation to the stabilization of national credit, 
particularly the payment or readjustment of currency debt. 

(2) To provide to the extent that may be found practicable a 
standard plan for the development of banking and monetary systems 
for the various countries in the Pan American Union and the estab- 
lishment of a uniform currency. Such currency shall be developed 
by and follow the requirements of trade. Such currency shall be 
supported by a gold reserve, or an equivalent available credit, in 
conjunction with a subsidiary coinage based upon an appropriate 
relation to the requirements of the people. 

(3) The Commission shall particularly devote itself to investigat- 
ing and collecting information which would justify individuals, cor- 
porations, or syndicates in granting loans from time to time for 
the purpose of making effective the plan herein provided as well as 
for other purposes. 

The plan for the establishment of the Pan American Finance 
Commission shall be submitted to the several countries by the Board 



212 PAN AMERICAN FINANCIAL CONFERENCE. 

of Directors of the Pan American Union, and shall be effective and 
binding upon each member for the period of ten years after the 
organization of the Commission upon the assent and subscription to 
the plan by at least fifteen members. 

Note. — Even if a member of the Pan American Union, such as the 
United States, may be regarded as having fiscal, monetary, and bank- 
ing stability, yet its interest in the development of similar prin- 
ciples among sister nations would justify it in bearing its propor- 
tionate share of the annual expenses of the Commission. 

Growth of domestic commerce in each country is vitally impor- 
tant to the. growth and development of its foreign trade. Nothing 
will more successfully promote such a development than a sound 
internal banking and surrency system. No country can be said to 
have such a system where there are constant fluctuations in the value 
of its medium of exchange. [Applause.] 

Secretary McAdoo. Gentlemen, there are three others who wish to 
be heard, and there are 50 minutes left. I shall apportion the time 
equally between them, giving about fifteen minutes each. I will first 
ask Mr. Charles A. Conant to address the Conference. 

Mr. Charles A. Conant (of New York) : 

Mr. Chairman and Members of the Conference. — I desire to 
say only a few words in behalf of the important principle of con- 
tinuity in the work of this Conference. 

One of your leading speakers this morning has pointed out that 
there has been a long procession of Pan American conferences, some 
of general character, and some of specific character, but that the work 
has been more or less abortive, or delayed in its fulfillment, by reason 
of the fact that there is no moving power to press the adoption and 
completion of its labors upon the several countries and interests rep- 
resented. I was therefore greatly gratified in the opening present- 
ment by the Secretary of the Treasury of the motives and purposes 
of this gathering to learn that it is proposed to create a joint high 
commission of permanent character to pursue the work laid out here. 
[Applause.] That I believe to be the keynote of the success of this 
Conference — that there shall be a body which shall be charged not 
only with the function of completing the work which has been begun 
here in the way of international laws, international agreements, and 
financial projects, but that it shall also have some authority to bring 
these subjects constantly to the attention of the different Govern- 
ments and great financial interests involved, in order that the re- 
sults, instead of disappearing with the adjournment of this Con- 
ference, shall go on as a steadily developing force. 



PROCEEDINGS. 213 

Personally I was much gratified also to learn that there would 
probably be referred to the committee charged with this subject the 
matter of uniformity of commercial laws. That is a subject not of 
spectacular character, but one which contributes greatly to smooth- 
ing away the obstacles to international commercial intercourse, and 
I will be pardoned perhaps for saying a word or two upon the 
progress already made in one or two branches of uniformity in com- 
mercial law, because I was myself the sole technical delegate of the 
United States at a conference held at The Hague on that subject — 
the subject of the international law of bills of exchange and checks. 

The first conference, held in the year 1910, was attended by repre- 
sentatives of practically all the powers of the world, including most 
of the powers represented here. I expected to find among the dele- 
gates from the Latin American countries a few of my associates at 
The Hague, but so far as I have observed, although several were 
originally named, none of them are here at the present time. But 
the second conference, in 1912, agreed upon a definite form of inter- 
national law governing the employment of bills of exchange. The 
United States and Great Britain alone did not sign the protocol of 
uniform law because of fundamental differences between the Anglo- 
Saxon system, based upon the common law, and the proposed uni- 
form law based, in part, upon the civil law descended from the 
Code of Justinian. The United States and Great Britain, however, 
in taking that attitude did not by any means imply the slightest 
hostility to the adoption of the uniform law by other powers, and 
had this been done before the European war there would have been 
in force but two great systems of law governing bills of exchange — 
what we may call the Anglo-Saxon system and the system of the 
uniform law. Had that law been in force to a considerable extent 
the difficulties caused at the outbreak of the European war would 
have been mitigated. 

I do not say, of course, that the uncertainty which occurred in 
regard to financial operations would have been entirely removed. 
But that uniform law dealt with the very question of the mora- 
torium, which has excited so much attention all over Latin America, 
as well as in Europe and in this country. It provided that for thirty 
days the right of the holder of a bill should be suspended without 
impairing his claims against the indorsers, and at the end of thirty 
days some other steps should be taken, until finally the entire question 
of settlement of bills should be adjusted in an orderly, simple, and 
legal manner. Unfortunately, very few, if any, of the powers had rati- 
fied the action of their delegates at The Hague in the adoption of this 
law, so that we were unable to test its efficacy as we could have done 
had the conference been held a few years earlier and the uniform law 



214 PAN AMERICAN FINANCIAL CONFERENCE. 

of bills been generally recognized and in force among the nations 
of the world. 

But I sincerely hope and believe it will prove to be the case that 
the standing committee on this subject will take up that subject and 
will examine the uniform draft adopted at The Hague and will 
endeavor to bring about complete harmony of action, so far as pos- 
sible, between the powers of the Western Hemisphere. If the United 
States finds itself unable to accept in full the terms of the uniform 
law, it will still be true that we shall reduce to two systems instead of 
twenty the laws now governing the bill of exchange on the American 
Continents. More than that, it was freely admitted at that confer- 
ence at The Hague by the French delegates themselves and other 
important countries that the Anglo-Saxon system was in many 
respects the simpler and better and that they would gladly adopt it, 
but they could not under their system of law come all the way at the 
beginning. So that if the United States should fail to agree to a 
draft which was acceptable to Latin countries, it would by no means 
imply a lack of harmony in carrying out the principles of uniformity, 
but only that we were working by gradual approaches that the dif- 
ferences between the common law and the civil law could be smoothed 
away. 

Practically all that I have said regarding bills of exchange ap- 
plies to uniform law of checks, except that at the Second Hague Con- 
ference only a preliminary draft of the law of checks was prepared 
for submission to the powers, and the final protocol was postponed 
to a future conference, which we may devoutly hope will be held 
soon after the rise of the dove of peace above the disturbed coun- 
tries of Europe. But there is no reason why we should not proceed 
to adopt a uniform law of checks to meet our own requirements 
without waiting for the countries at war to become parties to it. 

The same principle would apply to a law of warehouse receipts — ■ 
giving a more highly negotiable character to the warehouse receipt 
and throwing about it the proper safeguard to insure its negotiability 
and marketability ; and so on with respect to similar topics, which I 
believe are under careful consideration by the committee which it was 
the happy thought of your presiding officer to appoint to carry out 
the work of this convention. 

In respect to the monetary reform, with which I have perhaps a 
peculiar association and interest, I believe that this committee should 
not ignore that subject. It is a subject, however, requiring care, 
delicacy, and tact in its consideration. I am not myself a believer 
in the early adoption of a uniform monetary system or uniform 
coinage. Uniformity in standard, of course, is highly desirable, but 
uniformity of unit can not be obtained without very careful con- 
sideration of the question of standard of wages and prices in each 



PROCEEDINGS. 215 

country. Where a unit in a country is an easy multiple of that of 
the United States, some progress may be made toward better and 
closer adaptation of the unit of other countries to that of the United 
States. Already, as we know, two countries have adopted the 
American unit — Nicaragua, by her law of March 20, 1912, and Cuba 
by the law of economic defense of the 29th of October of last year. 
But it so happened that they were in a situation in the one case 
where a new unit was an easy multiple of the depreciated exchange 
unit, and in the other case where the gradual improvement in ex- 
change had made the currency already in use practically correspond 
to the American dollar. 

I believe that the subject should be carefully studied, and that it 
should be studied with reference — and with careful reference — to the 
national feeling and the national economic interests of all of the 
countries involved, and not with the attempt to run into a single 
groove or to impose a rigid mode of system of exchange, which 
may not be adapted to our American unit. 

To that end I have proposed a scheme, not very ambitious, but 
merely to bring the subject before the permanent committee, and I 
will read it. I go too far in referring to it as a scheme ; I mean I have 
prepared a suggestion to this effect : 

That the permanent committee on uniform laws be authorized to study the 
best means of facilitating remittances of money and of credit instruments be- 
tween American countries, and such approach to stability or uniformity as may 
be practicable in their monetary systems, with due regard to their national 
economic interests, and to this end said committee is authorized in its dis- 
cretion to appoint subcommittees, employ experts, and make recommendations 
to the various countries represented. 

I will simply ask that that be referred to the general committee on 
that subject without any recommendation, simply for such consider- 
ation as they may see fit to give it. 

One other suggestion was made here which impressed me very 
favorably, and that was the creating of an international tribunal to 
deal with the question of uniform laws. If we are to have a uniform 
law of bills of exchange or a uniform law of checks and a uniform 
law of warehouse receipts, and so on, with other commercial subjects, 
then it is of the very highest importance that that law should be uni- 
formly interpreted. Otherwise it will soon cease to be uniform by 
reason of the diverse interpretation of the tribunals of different coun- 
tries. That means a problem involving time and deliberation, be- 
cause, as it developed at The Hague, when the subject was broached 
there, it was not within the constitutional power of some govern- 
ments under their present governing systems to waive the declaration 
that the decisions of their supreme court are the supreme law of the 
land. But I consider that in this case for a court or the supreme 



216 PAN AMERICAN" FINANCIAL CONFERENCE. 

tribunal to decide purely economic differences to be a technical diffi- 
culty and .not a moral or practical difficulty. In other words, if it 
develops that an international tribunal is the best means of securing 
uniformity of commercial law and practice to the Western Hemis- 
phere, then I believe these countries will be willing, by constitutional 
amendment or otherwise, to meet the requirements of the situation. 
At the Hagu« Conference, with respect to bills of exchange, a very 
similar proposition was made by a German delegate — a man of great 
ability and breadth of view — that the conference should express the 
wish to their several governments that they take under consideration 
the subject of an international tribunal to decide these questions of 
commercial law; and, mind you, this proposition is very different 
and not much more concrete, and I may say more practicable, and 
involves many less difficulties, than those proposals which have been 
made for an international tribunal to deal with political or diplo- 
matic questions. There can be no political or diplomatic objection 
to the determination of private differences — differences almost exclu- 
sively private and not political and diplomatic — as to the meaning of 
certain provisions regarding bills of exchange or as to questions 
arising under them. Therefore, while the objective is probably at the 
end of a long road of deliberation, consideration, and comparison 
of views, I believe the time will come when it will be practicable 
to establish an international tribunal which shall reconcile all of these 
purely technical business questions between the citizens of the West- 
ern Hemisphere, and, let us hope, eventually between the citizens of 
the world. [Applause.] 

Secretary McAdoo. I shall now call upon Mr. Herbert E. Eldridge, 
of New York, to whom I have allotted fifteen minutes. Mr. Eldridge 
is vice president of the National City Bank. When he has finished I 
shall call upon Mr. J. J. Arnold, of Chicago, to whom I shall allot a 
similar amount of time. 

Mr. H. E. Eldridge (of New York) : 

Mr. Secretary, Ladies, and Gentlemen. — It has been only in 
recent years that the United States has gained recognition as a large 
exporter of manufactured products. Since the close of the Civil War 
the energies of our people have been devoted largely to the develop- 
ment of our own country, and one has only to travel the length and 
breadth of the land to see to what good purpose those energies have 
been directed. Such export trade as we possessed was, until recently, 
the result of the sale of our surplus raw material and food products 
and such manufactured articles as the skill and ingenuity of our peo- 
ple permitted us to produce to better advantage than others. During 
the past fifteen years the attention of our business men has been called 



PROCEEDINGS. 217 

to the gradually changing economic position of our country, which 
demonstrated clearly that an increasingly larger proportion of our 
food products was being consumed by our growing population and 
that our own demand for manufactured goods was causing more and 
more attention to be paid to that line of endeavor, thus bringing 
about a more rapid growth of the cities and a consequent further 
drain on our heretofore large surplus of food products. With char- 
acteristic energy, our people have devoted more and. more attention 
to manufacturing and have been able not only, in large measure, to 
meet the increased home demand, but to more than offset the dimin- 
ishing exportable supply of foodstuffs by the sale of certain manu- 
factured articles which we can produce advantageously and which 
have found favor abroad. 

It has, however, gradually become plain that if we are to take 
our proper position among the manufacturing nations of the world 
we must devote a fuller measure of thought to the development 
of the machinery so necessary to secure in the markets of the 
world our proper proportion of that business. To the casual mind 
such an ambition might seem easy of accomplishment, but a care- 
ful study of the fundamental principles of foreign trade puts 
before us clearly the difficulties in the way. We find ourselves in 
active competition with many great nations which have devoted 
years of study to the subject and whose success has only been 
attained by the active cooperation of their Governments, manufac- 
turers, business men, investors, and financiers. We observe that 
those nations have encouraged the building and operation of mer- 
cantile marines, have given official sanction to proper combinations 
of manufacturers for the promotion of the economical sale of their 
goods abroad, have looked with favor upon the establishment of 
banks in foreign countries, and have supported and encouraged 
investments on the part of their citizens in foreign securities, as well 
as their participation in enterprises tending to promote the economic 
growth and trade development of other countries. 

An increase of trade between two countries naturally brings about 
a mutually better understanding of the resources and abilities of 
each. It is proper, and it invariably follows, that with the growth of 
such trade the desire becomes reciprocal to buy the one from the 
other when it can properly be done, and especially so if resultant 
balances are often adjusted by the purchase of securities rather than 
the shipment of gold. If a country is in the enjoyment of active 
business relations with another it would be shortsighted indeed 
should it fail to extend to such a desirable customer every legitimate 
opportunity to increase its purchasing capacity, and this can best be 
done by aiding and stimulating its industries and participating in 



218 PAN AMERICAN FINANCIAL CONFERENCE. 

the development of its natural resources. Such projects, when chosen 
with good judgment, usually prove successful, and the securities 
based thereon become well known and enjoy high standing among 
investors. Until last year the manufacturing export trade of the 
United States had not reached the proportions that made it necessary 
for her citizens to give serious thought to this phase of foreign trade, 
but since the outbreak of the deplorable war now raging in Europe 
it has become more and more apparent that if we are to dispose of 
a large volume of our products to foreign countries we must show a 
willingness to take in part payment therefor some portion of such 
securities as in our judgment constitute safe investments. The rea- 
son for this is not difficult to explain, because so long as the balance 
of trade runs heavily against the purchasing country it makes the 
sale of securities or the shipment of gold necessary, and if gold be 
insisted upon the purchasing power of the customer is seriously im- 
paired. It is interesting to note that since the outbreak of the war 
and the accumulation of a large trade balance in our favor, conse- 
quent to our increasing volume of exports, we have not only repur- 
chased from Europe millions of American securities formerly held 
by her banks and investors, but have bought some of her newly issued 
securities. History shows that nations exporting manufactured 
goods in large volume become large investors, and there is good reason 
to believe that as the manufacturing export trade of the United 
States increases and closer attention is paid to the needs of foreign 
markets the attitude of our bankers and the investing public will 
become favorable to such sound securities as may from time to time 
be offered. 

One of the prime essentials to the wise development of foreign 
trade is the proper provision for the economical, efficacious and 
prompt interchange of all credit transactions between countries trad- 
ing with one another. The bill of exchange is and has been for years 
the medium through which all commercial transactions between na- 
tions have been handled. The evolution of the bill of exchange to 
its present essential place among trade documents is most interesting, 
and did time permit it would be well worth while to trace its de- 
velopment and the many uses to which it is put. Suffice it to say that 
the establishment of banks in all the principal trading centers of the 
world has given to the bill of exchange a market commanding most 
favorable rates of discount. Great Britain, France, and Germany 
long ago learned the value of banks in foreign trading centers favor- 
ably disposed to their bills, and in nearly every quarter of the globe 
are to be found such institutions dominated by influences favorable to 
them. Especially is this true of Great Britain, the first great nation 
to realize the value of foreign trade, whose wise development of the 



PROCEEDINGS. 219 

bill of exchange gave to London its predominant position as a money 
center and made it the clearing house for the trade of the world. 
Italy, Spain, Holland, Switzerland, Belgium, and other European 
nations have their banks and agencies abroad, thus giving to all those 
countries assurances that bills drawn on their banks and merchants 
will be given due honor, not to speak of the inestimable value of these 
branches in enhancing the ability of exporters to do business abroad 
by giving them full knowledge of fundamental and general condi- 
tions prevailing in trade centers and credit advice. It is quite clear 
that if the dollar bill of exchange, in which we in the United States 
are so interested, is to take its proper place among the trade instru- 
ments of the world, facilities must be provided for its prompt and 
satisfactory negotiation wherever its circulation is of importance to 
our trade. 

We can not expect the dollar bill of exchange to be handled on as 
favorable bases as those of our competitors so long as the business 
must be transacted through banks controlled by competitive agencies. 
Until recently practically all the purchases made by American im- 
porters from Central and South American countries were through 
the medium of bills of exchange drawn on London and practically 
all settlements made for the exports of our manufacturers to the im- 
porters of Central and South America were paid for by means of 
sight and time drafts drawn on London. There are few portions of 
the entire world where the British banker is not represented, either 
by branch banks or banks organized under British influence. Lon- 
don has, through the perfection of its discount market and a marvelous 
banking system, created a tremendous banking power and an ideal 
credit system. 

By reason of its commanding position as the clearing center of the 
trade of the world it became of first importance that the banks of 
other countries handling bills created by foreign commerce and trade 
and granting credits against which bills were drawn payable in Lon- 
don should place themselves in close touch with that market by means 
of accounts opened and balances maintained with existing banks or 
establishing agencies in London. So long as the greater portion of 
the trade settlements of the world are consummated through the 
medium of sterling bills it is inevitable that the demand for such 
bills will never fail and that the rates at which they are taken on 
the London discount market will be the controlling factors in regu- 
lating the rates at which all bills drawn in sterling or otherwise are 
taken. London's position as the clearing-house center of the trade 
of the world made it the market on which has been floated the bills 
of exchange representing the trade of the world, thus giving it a 
preponderating advantage and enabling it by means of the simple 
process of raising or lowering its discount rate to direct the move- 



220 PAN AMERICAN FINANCIAL CONFERENCE. 

ment of gold and credit toward or from that market, thus inviting 
and invariably receiving any assistance or support needed when the 
volume of bills offered for discount assumed proportions threatening- 
gold exports to the extent of unduly lowering its reserves or discourag- 
ing the employment of foreign funds or credits on its market when 
its own supply was sufficient to care for the demand. 

Again, the liberal investments made by the English people in the 
securities of other countries has created a still further demand for 
London exchange to settle interest and principal obligations. A bill 
drawn on a London firm or bank of high standing is always discount- 
able in every market at the lowest prevailing rates, and naturally a 
bill drawn on London has come to be regarded as the most desirable 
form of bill in existence. The result has been that the market quota- 
tion for the London bill has been made as fine as it well could be and 
the bill has commanded a premium over that drawn on any other 
center. In fact, until the recent outbreak of hostilities the rates for 
bills on all other countries were invariably governed by the quota- 
tions for sterling. It is small wonder, then, that when war was de- 
clared and the delicate machinery of the market where the trade set- 
tlements of the world were effected was suddenly thrown out of com- 
mission consternation should have been felt and chaos should have 
reigned for a time in every center. The result could not have been 
other than it was. We had made the mistake of placing too much 
dependence on one center. 

Before any facilities were offered for the purchase of bills drawn 
on the United States in Central and South America such bills were 
subject to a discount from the London rate of from 1 per cent to 
2 per cent, and sometimes even more, for the reason that we did not 
have the facilities for the prompt sale of such bills on a discount 
market in this country, nor was the need of creating or of main- 
taining balances in this country apparent to bankers abroad. Our 
laws formerly did not permit national banks to accept drafts, whether 
drawn against the shipments of goods from one country to the other 
or otherwise. With few exceptions, State banks were prohibited 
from making such acceptances. The result was that only bills 
drawn on firms were offered, and the high rate that the negotiators 
were compelled to pay in order to effect their sale made it far more 
economical and desirable for the importer to arrange either directly 
or through his banker for the opening of a credit with some re- 
sponsible London bank or acceptance house. As a consequence, prac- 
tically all the business created by the large importations of this coun- 
try was handled through the medium of bills drawn on and financed 
in London. The dollar bill of exchange was virtually unknown. 

The tribute thus paid to our banking friends abroad in the estab- 
lishment of credits of this nature and the financing of the bills of 



PROCEEDINGS. 221 

exchange drawn thereunder has been an absolute loss to us and a 
source of great profit to them. So long as our banking laws re- 
mained as they were it was impossible for our bankers to afford the 
relief they should or establish the facilities necessary to bring about 
a change. Until the passage of the Federal Reserve Act the laws 
governing banking throughout the United States did not give to the 
country the ability to extend credit that our resources and banking 
strength warranted. The Federal Reserve Act marked the greatest 
step forward ever made in the financial progress of the United 
States, and will result in vastly increasing the importance of our 
country as a world money center. One of the prime necessities in 
the creation of an important money center is an established dis- 
count market, a market wherein may be sold at the lowest rate all 
bills drawn and accepted by houses and banks of high credit standing. 

The Federal Reserve Act permitted member banks to accept to 
the extent of 50 per cent of their capital and unimpaired surplus all 
bills involving the importation and exportation of goods. A sub- 
sequent amendment permits an additional 50 per cent, subject to the 
approval of the Federal Reserve Board. To-day in our various 
money centers all such bills accepted by responsible banking houses 
and firms command a rate heretofore unknown, for the reason that 
they constitute the highest and most desirable form of credit offered 
in the shape of short-term obligations and are eagerly sought by 
bankers and investors desiring temporary and liquid investments. 
Such bills can be bought or sold at will, and while practically all of 
them are carried by their purchasers until maturity, they are car- 
ried with the comfortable feeling that under any conditions that 
may arise they are either through the medium of our discount mar- 
ket or by rediscounting with a Federal reserve bank instantly con- 
vertible into money or bank credits. 

There has already sprung up in our country a very good market 
for acceptances of this nature, but the volume offered is not of the 
magnitude it should be, nor does it make the market as elastic as 
desired. Indeed, were we able to attract the bills drawn against all 
our imports the volume would not be sufficient to establish a market 
of the breadth and magnitude we are amply able to support. We 
may therefore feel that we can, in safety and with the assurance of 
a good market, look forward to the financing of certain portions of 
our export trade, and even to the creation of dollar acceptances to 
finance trade between other countries than our own. Experience will 
no doubt teach us that the acceptance privilege accorded member 
banks, and its use indulged in by duly authorized State banks, as well 
as private bankers, strong acceptance houses, and importers of high 
credit standing will prove a distinct benefit in the furtherance of 
foreign trade and permit us to be of great assistance in the develop- 



222 PAN AMERICAN FINANCIAL CONFERENCE. 

ment of the natural resources of those countries which may honor us 
with a liberal proportion of their trade. 

It is highly desirable that the dollar bill of exchange should be 
given every possible opportunity to enjoy the standing which it ought 
to have, and the best way for this to be accomplished is to provide 
facilities abroad for the prompt negotiation of all bills drawn upon 
substantial United States banks and importing houses. 

It is obvious that if against credits opened in this country facilities 
are provided whereby a foreign exporter is enabled, in the money 
center of his own country, to negotiate bills drawn against the United 
States banks and houses on a basis equally as favorable as he could 
negotiate bills of exchange drawn on London or any other money 
center, it will be agreeable to him to handle his transactions with the 
merchants of this country in that manner, and thus we can attract to 
the United States all such bills of exchange and give to our bankers 
the opportunity to finance this immense volume of highly desirable 
business, instead of permitting it to go to bankers abroad as here- 
tofore. 

Under the provisions of the Federal Reserve Act member banks 
having a capital and surplus of $1,000,000 or more are per- 
mitted to establish branches abroad, and if advantage is taken of 
this privilege it is manifest that in the course of time our bankers 
will be able to provide markets at the point of origin for practically 
all dollar bills of exchange that may be drawn, and likewise afford 
our foreign customers every facility for the handling of their pur- 
chases from us. Branches so established will be in position to pur- 
chase bills drawn in dollars on the proper basis and give to such 
bills the respect to which they are entitled and, by encouraging their 
use, greatly stimulate the business of this country with our foreign 
friends. Branch banking is a new field to the commercial bankers 
of the United States, and for a time must go through what may be 
termed an experimental stage. To achieve the best results and pro- 
mote the rapid expansion of our foreign trade the establishment of 
branch banks abroad should be done more with an eye to the advan- 
tages accruing to trade than to profits for the branches, for to do the 
work effectively and well such branches for a few years to come must 
assume, at considerable expense to themselves, the roles of informa- 
tion bureaus as well as banks, and not only must they be prepared to 
assist the exporters of the United States in every way possible, but 
they must be able competently to advise the exporters of the countries 
in which they are located, of possible markets in the United States. 
They must be equipped and have the disposition to advise recipro- 
cally in the matter of trade opportunities and credits and be imbued 
with a sincere desire to serve the interests of the country in which 
they are located, so far as lies within their power. They should 



PROCEEDINGS. 223 

advise the home office of such openings as may occur for the profit- 
able investment of funds in enterprises of merit, in order that the 
information may be disseminated to all who are interested, and 
should report all anticipated public issues of securities. Our people 
have for so many years found the natural resources and rapid devel- 
opment of this country afforded such desirable opportunities for in- 
vestment that little attention has been paid to foreign securities. It is 
now believed, however, that a better understanding not only of their 
desirability but the wisdom of making such investments will become 
increasingly apparent. In furtherance of this, branch banks will 
surely prove most beneficial. 

There is good reason to believe that by virtue of the establishment 
of an effective and intelligent branch banking system in many foreign 
countries and a broad discount market at home we will be able to 
attract a much larger share of the world's banking business than 
many would have thought possible. 

In order that our present financial position as compared with 
former years may be better understood it is proper to say that for 
many years the bankers of our country were unable, by reason of the 
legal restrictions surrounding them, to extend to the business in- 
terests and the country at large the banking facilities to which they 
were entitled. Notwithstanding our national wealth and stock of 
gold exceeded that of any nation of earth, we more than once found 
ourselves sadly embarrassed to care for our needs and forced to lean 
upon the more highly developed systems of banking abroad. It 
would be difficult indeed to calculate in dollars and cents the losses 
occasioned by the recurring panics to which we were subject or to 
compute the years we have lost in our march of progress. The 
bankers of the United States were more than pleased with the 
passage of the Federal Reserve Act, which went into effect in Novem- 
ber 1914. They are keenly alive to the far more favorable position 
they now occupy to be of assistance in developing not only the 
resources of our own country but in lending a helping hand wherever 
they properly can to the commerce of the world. Even yet many of 
them do not fully appreciate the extent to which their power to 
serve the public has been augumented nor the full measure of the 
benefit arising from their ability to present a solid front to adversity. 
The Federal Reserve Act does not, perhaps, go as far as it should in 
the perfection of our financial machinery, and the further amend- 
ments experience shows to be necessary will doubtless be made, yet 
it marks a step forward in our financial independence, the length of 
which time alone will show. For the first time in our history we are 
able to take advantage of our great wealth, large stock of gold, and 
credit-expansion power in an entirely safe, proper, and scientific 
manner. 



224 PAN AMERICAN FINANCIAL CONFERENCE. 

The bankers of the United States will surely do all they can to 
further our export and import trade and do their part to make the 
dollar bill of exchange favorably known so that it will command 
respect among the trade instruments of the world, nor will they be 
found lacking in doing what they can to promote the material pros- 
perity of the various countries in which they establish branches. 

In seeking to extend our relations abroad it is but natural our 
eyes should turn to our neighbors, the nations of Central and South 
America. We know that we need their kindly interest, and we feel 
that we can be useful to them. Therefore a meeting of this nature, 
the bringing together of their representative men with those of our 
own country can not be otherwise than beneficial, for it is quite clear 
that we have a community of interest that can be best served by a full, 
frank, and free discussion of our mutual needs and the formulating 
of plans to bring about the desired results along lines of equal ad- 
vantage and reciprocal helpfulness. [Applause.] 

Secretary McAdoo. I now take pleasure in calling on Mr. J. J. 
Arnold. 

Mr. J. J. Arnold (of Chicago) : 

Worthy Guests of our Nation, Mr. Secretary, Ladies, and 
Gentlemen. — At the time of the outbreak of the European war I 
was besieged by newspaper men who were anxious to know what 
possible benefits might or would accrue to the United States of 
America as a result of this terrible conflict. At the time I was 
much more interested and concerned with possible losses and dis- 
advantages rather than with possible or probable gain. Upon re- 
flection, however, I recognized a rift in the clouds. That rift was 
Latin America and the Orient. There are a few in our country 
who have for a goodly number of years been students of the ques- 
tion of trade between Latin America and the United States, and 
with all the encouragement that could be given by a compara- 
tively small number of students of the subject very little impression 
was made upon our commercial life as a whole. It has taken a great 
European disturbance to emphasize not only the possibilities but also 
to give recognition to difficulties in the way of developing this inter- 
course. It is most gratifying to all of us that this interest has found 
such profound expression as is given by this gathering. 

Although some have long ago recognized Latin America as a very 
promising field, it would appear that the entire Nation now beiieves 
that the territory is ready for harvest. Now, it is a well-understood 
fact by those who are familiar with the principles of agriculture that 
a field must first be cultivated, after which the right kind of seed 



PEOCEEDINGS. 225 

must be sown, and this in turn must be given time t© • germinate and 
grow and ripen before the crop can be garnered. 

Many of our people, and more particularly our newspapers, were 
of the opinion that Europe had been cultivating the soil, sowing the 
seed, and that the time of harvest was now at hand, and, inasmuch 
as Europe was not able to harvest the crop, all that was necessary 
for us to do was to step in and reap the results of their labors. Such 
reasoning, however, left out of consideration the one important fact 
that practically all of the machinery which had been made use of 
for the production of the harvest had upon it the stamp *' made in 
Europe and for European purposes." I have reference now more 
particularly to the selling agencies, established direct connections, 
and banking facilities. While it is undoubtedly true that all of this 
machinery, temporarily interrupted in its former activities, would 
be perfectly willing to serve the United States of America, it is 
equally true that in all probability when this war is over they will 
naturally revert to their old love. It is my candid opinion that we are 
now moving in the right direction and along sane and sensible lines. 
To my mind, if this Conference is to accomplish anything at all, it 
must naturally be of the character of cultivating the territory inter- 
ested, and I for one feel that our nation, as well as the countries of 
Latin America, should be congratulated upon the farsightedness of 
our Secretary of the Treasury in calling together the representative 
men of all these nations for such a purpose. I am convinced that it 
is one of the biggest Pan American thoughts to which any American 
statesman has ever given expression. If my judgment is correct, the 
attitude of mind of the men here gathered is that we are now laying 
the foundation for work which will be judged by its results, not so 
much in the immediate future as in twenty-five years from now. It 
appears to me that it is the consensus of opinion that the object for 
which we are working is to build sanely, safely, and wisely machinery 
for the carrying on of commerce between our nations in a manner 
similar to that which has proven successful on the part of the Eu- 
ropean countries. We are doing pioneer work, and pioneer work 
is always done with an eye to the distant future. 

From the standpoint of finance there is no question in the minds 
of those conversant with the situation but that we are most fortu- 
nately situated at the present time. Mr. Vanderlip the other day, 
in his always clear and able manner, emphasized this thought. 

In my humble opinion it would be far more productive of good 
if this Nation would use more of its surplus capital for constructive 
work in Latin America as" well as in the Orient rather than to lend 
our credit to European nations, where the work of destruction is 
thereby furthered. 

98257°— 15 15 



228 PAN AMERICAN FINANCIAL CONFERENCE. 

Every American conversant with the situation is proud of the 
work which Mr. Vanderlip^s institution has already accomplished in 
Latin America. Such a work can be done only by the larger banks of 
our land. We believe, however, that much more than any one 
institution can undertake to do should be done. There are banking 
institutions throughout our land interested in foreign business anx- 
ious to cooperate with each other in this development. Our present 
banking laws, however, do not permit of such cooperation. We hope 
that in the next session of Congress this permission will be granted. 
If this is done, then any group of banks, or, if desired, all of our 
banks interested in foreign trade, could cooperate in the furnishing 
of capital and banking facilities adequate for the needs of every 
section of our land. 

I realize that the question of finding men qualified for the carry- 
ing on of such work is of great importance and may be considered a 
difficulty in the way. The only way to secure men is to train them. 

I am not advocating a development of foreign banking facilities 
which would be of a mushroom growth, but the same should be 
allowed to proceed along the lines of normal development. This 
may not be as rapid as some would like, but I am confident will 
respond to actual requirements. What we do we must do well and 
in a way which will make a favorable impression in the countries 
with whom we are seeking to do business. 

Should capital of such countries seek to cooperate with us this 
should be made possible. In this way such an institution would 
become cooperative not only at home but between the countries 
interested. Such an organization necessarily should have broad 
powers and should be organized with the thought in mind not only 
to finance exports and imports, guaranteeing payment at either end, 
but should also facilitate the financing of public undertakings. 

In our country we have been advocating a fixed foreign policy' 
which will insure protection for investments made by us in foreign 
lands. To our friends from Latin America I would like to say that 
we in turn feel that we have a right to expect and demand from your 
countries and from your governments every possible protection which 
you can give us. 

In conclusion I would like to emphasize the fact that while we 
do consider Latin America a field worthy of our attention, it is not 
our desire to apply methods of exploitation, and we believe that, on 
the other hand, the Latin-American Republics should recognize that 
the United States of America also is a field which you in turn 
should seek to cultivate. 

Trade between two countries must be based upon an exchange of 
commodities in as far as it is possible. The United States of 



PROCEEDINGS. 227 

America is rapidly becoming an urban instead of a rural country. 
This is why we are now seeking, perhaps as never before, a market 
for our manufactured articles. In your countries the reverse is still 
true, and on this account your natural products will necessarily be 
wanted in our land in increasing quantities. 

We certainly bid you welcome as guests of our Nation, and we are 
confident that as we cultivate your acquaintance permanent friend- 
ships are bound to be established. This quite naturally will result 
in a greater exchange of goods, and it is our hope that our commer- 
cial relations will soon become so closely interwoven and developed 
on a basis which will make impossible in this hemisphere what we 
now are witnessing in Europe. This is our fondest hope and sin- 
cerest prayer. [Applause.] 

MISCELLANEOUS BUSINESS. 

Secretary McAdoo. The Committee on Uniformity of Laws will 
meet to-morrow morning at 11.30 o'clock in the Columbus Koom of 
this building. 

The Secretary-General, Dr. Eowe. I wish to inform the mem- 
bers of the Conference that if they so desire, automobiles will be 
here to take them to the Shoreham to pick up members of their 
parties who may not be here, and will then proceed to the Navy Yard, 
or they may go direct from here to the Navy Yard, as they prefer. 

Mr. C. A. Green (New York) : 

Gentlemen oe the Conference. — I do not wish to take more than 
a minute of your time, still there is a subject that I think is worthy 
of consideration by you before you finally adjourn. Two things have 
been called to my attention, as matters that might very properly come 
before this Conference. 

One is that while we are very large producers of silver, yet the 
market for silver is in London. For example, one of the Latin- 
American countries net long ago had its stock of silver bullion bear- 
ing the mark of an American producer, but the silver instead of be- 
ing purchased in the United States was purchased in London. The 
result was that the buyer paid two commissions and extra freight 
and insurance. He purchased in London because it was the financial 
center, and the same bankers that made the loan sold the silver. This 
ought to be changed, and it is one of the very things which we hope 
this Financial Conference will take up. 

Secondly, when the Latin- American countries want silver coinage 
they go, since the market for silver is in London, to the European 
mints; naturally to Birmingham or Paris, where their coinage is 
made. I understand that we have authority to use our mints for 



228 PAN AMERICAN FINANCIAL CONFERENCE. 

coinage for other governments, and they have been so used to some 
extent, as, for example, in the case of Cuba. Again, since we are large 
producers of silver, why can not our mints be used for doing the 
coinage of our Latin- American friends? It would save them ex- 
pense, it would keep our mints operating, and would thus be an ad- 
vance toward making New York the market for silver. 

Now, gentlemen, it seems to me that before the final adjournment 
of this Conference this subject is well worthy of your serious con- 
sideration. I leave it for you for such use as you may see fit to make 
of it. [Applause.] 

Secretary McAdoo. Gentlemen, I shall put Mr. Charles A. Conant 
on the Committee on Uniformity of Laws. 

We will now adjourn until 3 o'clock to-morrow afternoon. In the 
meantime the Group Committees will continue their work. 

(Thereupon the Conference adjourned.) 



FIFTH SESSION 



FRIDAY AFTERNOON, MAY 28, 1915 



229 



FIFTH SESSION, FRIDAY AFTERNOON, MAY 28. 



The Conference met at 3 o'clock p. m. 

Secretary McAdoo: Gentlemen, before we begin the proceedings 
this afternoon I desire to introduce to you the chairman of the 
Foreign Relations Committee of the House of Representatives of 
the United States, the Honorable Henry D. Flood, of Virginia, 
through whose courtesy, as well as through whose assistance, we are 
much indebted for the action of Congress in passing the necessary 
resolution authorizing this Conference. I want him to say a few 
words of welcome to you. [Applause.] 

Hon. Henry D. Flood (of Virginia) : 

Mr. McAdoo and Gentlemen of the Pan American Financial 
Congress. — I gladly avail myself of this opportunity to extend on 
behalf of the Congress of the United States a brief word of welcome 
to the delegates to the Pan American Financial Congress and to 
assure Secretary McAdoo and the Conference that I believe the Con- 
gress of the United States will do all in its power to carry out the 
results of your deliberations [applause] and will do whatever is 
possible to enlarge and extend the financial and commercial relations 
and the transportation facilities between this country and the coun- 
tries of Central and South America. 

I think the conception of Secretary McAdoo in bringing about 
this Conference was a great stroke of statesmanship, and when it 
was first broached to Congress it met, with few exceptions, the instant 
and hearty approval of the membership of that body. 

My admiration for the people and my faith in the future of the 
countries of Central and South America are daily enhanced since I 
began a systematic study, with the aid of my friend and your friend, 
the Honorable John Barrett, of the history and possibilities and great- 
ness of those countries, and on behalf of the Congress of the United 
States I extend to their delegates a most hearty welcome. Our gates 
swing open to receive you. Our hearts welcome you. And our 
hope is that you may at least get a small fraction of the pleasure of 
being with us that we receive through your coming here. [Ap- 
plause.] 

231 



232 PAN AMERICAN" FINANCIAL CONFERENCE. 

By reason of the position which I occupy in the legislative body 
of this country it has been my privilege and duty to be sponsor for 
much of the legislation in relation to the splendid countries to the 
south of us. I took pleasure in carrying out the suggestion of the 
President and secured an act of Congress authorizing him to ac- 
credit an ambassador instead of a minister plenipotentiary to the 
great countries of Argentina and Chile. [Applause.] I took a 
greater pleasure in carrying out his suggestion that a minister be 
accredited to the prosperous country of Uruguay and one to the 
heroic country of Paraguay, instead of accrediting one minister to 
the two countries, as had formerly been the custom. [Applause.] 

I took pride in the passage of a resolution by the Congress of 
the United States extending the thanks of that body to Ambassador 
Da Gama, Ambassador Kaon, and Ambassador Suarez for their un- 
selfish and gracious and useful work as mediators in the trouble 
between the government of this country and the leaders of the con- 
tending parties in the Eepublic of Mexico. But I believe, gentle- 
men, and I thought so from the very time that this matter was first 
broached, that the most important legislation the Congress of the 
United States has had to deal with in the last few years in refer- 
ence to Pan American affairs was this proposition for the Pan 
American Financial Congress. 

We are at a critical period in the affairs of the Western Continent. 
What we do now and in the near future will determine whether or 
not the Republics of America shall stand together and cooperate 
for the good of all the American countries. I believe this Confer- 
ence is a long step in securing that cordial cooperation. I know 
that the Congress "of the United States will do all that can be 
expected to bring it about. Standing as we all do for high ideals 
and sound principles of government, I hope and believe that before 
long this will be attained. [Applause.] 

In the farthest east the first dim light of civilization was seen and 
westernward the star of empire has taken its course ever since. The 
cycle is completed. The star blazes to-day in the world's extreme 
Avest. The leadership of the future rests upon the Americas, and 
the world will be blessed with that leadership. [Applause.] 

We of the Western Hemisphere stand in the light while many 
of the great nations of the Eastern Hemisphere are to-day standing 
in darkness. We are preparing for peace. They are waging war. 
We stand for ideals and for principles that will prevail, and that 
will make our leadership permanent; ideals and principles which, 
seen from the misty heights of the future, will mark out the way 
and make clear the path which all the nations of the earth will trav- 
erse in God's appointed time. It is a happy omen for the future of 



PROCEEDINGS. 233 

the world that the Republics participating in this Conference are 
united by treaties which require time and deliberation before any 
trouble shall arise out of disagreements between us — the year of 
deliberation for the cooling of passion. The splendid result was 
the conception of our great Secretary of State. The President, with 
his wide vision and his acute insight into the heart of economic, 
political, and international conditions, promptly indorsed this con- 
ception and gave it a prominent place in his first annual address to 
Congress. When the principles of these treaties become generally 
observed we will see everywhere over this world happy and pros- 
perous countries and contented people, and the names of Wilson and 
Bryan will spring to the lips and live in the hearts of mankind like. 
a song learned at the mother's knee. [Applause.] 

Secretary McAdoo: The Secretary-General wishes to make a few 
announcements. 

MISCELLANEOUS ANNOUNCEMENTS. 

The Secretary-General, Dr. Rowe: I beg to announce that we 
have received a telegram from the conference of bankers at their 
meeting in San Francisco, the Bankers' Association of the Pacific 
Coast and Rocky Mountain States. The telegram is as follows : 

[Telegram.] 

San Francisco, Cal., May 27, 1915. 
Secretary of Conference of Bankers of Central America and South America, 
with the Secretary of the Treasury, Care Treasury Department, Washing- 
ton, D. C: 

I have the honor to transmit for your attention the subjoined resolution, 
which was unanimously passed at the convention here to-day by the Bankers' 
Association of California, Oregon, Idaho, and Nevada. 
Yours, respectfully, 

Frederick H. Colburn, 
Secretary of Joint Convention. 
Whereas a Conference is now being held in Washington, D. C, between the 
ministers of finance and leading bankers of Central and South American 
countries with the Secretary of the Treasury, this Conference having in view 
the discussion of problems growing out of the opening of the Panama Canal 
and looking to the establishment of closer commercial relations between the 
countries represented at the conference : Now, therefore be it 
Resolved, That this convention of bankers from the States of Arizona, Cali- 
fornia, Idaho, Nevada, and Oregon fully realizes the importance of the subjects 
to be considered to this entire country and particularly to the Pacific coast; 
that it awaits with much interest the result of the deliberations and believes 
that the better understanding growing out of the meeting will be productive of 
much good to all concerned. 



234 PAN AMERICAN FINANCIAL CONFERENCE. 

Resolved, That this convention extends to our distinguished visitors cordial 
greetings and wishes for them a pleasant sojourn in this country and a safe 
return. 

Resolved, That the secretary of this convention be instructed to telegraph 
these resolutions to the secretary of the meeting in Washington. 

The Secretary-General, Dr. Eowe: I desire furthermore to state 
that the automobiles for this afternoon's trip to Fort Myer will 
leave the Pan American Building at 4.30 o'clock, instead of 5 o'clock, 
as announced in the original program. The hour of 4.30 o'clock is 
indicated in the final edition. 

I am also requested to ask the members of the Conference if 
they will be good enough — in case they have not had time to an- 
swer the invitation for to-morrow evening's banquet — to indicate 
on their cards whether or not they are able to attend, using the words 
" yes " or " no," and hand these to me. It will save them the time of 
writing out a formal acceptance. Those in charge of the banquet are 
very anxious to haT e at the earliest moment possible the names of the 
gentleman who will attend. 

In conclusion, let me ask the delegations that as the roll is called 
for reports of the Conference Committees they will be good enough to 
let us have a duplicate copy, in case such a duplicate copy is avail- 
able, in order that we may use one of the copies either for mimeo- 
graphing or printing, that point depending upon the time at our 
disposal. 

Secretary McAdoo : Gentlemen, the time of the session this after- 
noon is so limited that it will not be possible to read any of the 
reports that may be submitted to-day. We shall, therefore, ask 
those of you who have completed your reports to hand them to 
the Secretary-General, so that they may be printed ; and to-morrow 
we will have the entire day within which to read reports, if you 
desire to have them read, and devote such time as may be possible 
during the concluding session to a discussion of them, and also to 
the consideration of any other matters that may be brought before 
the Conference. So I shall ask those who have reports ready to be 
good enough to hand them to the Secretary-General this afternoon. 
That may be done at the close of the session or just a few minutes 
before the adjournment. 

I think on reflection, and as the Secretary-General reminds me, it 
might be better to call the roll of the countries and let those who 
have their reports ready answer to the roll call, and that course will 
now be taken. 



PROCEEDINGS. 235 

ROLL CALL FOR GROUP REPORTS. 

(The Secretary-General proceeded to call the roll, and the dele- 
gates responded as follows:) 

Argentina : The report will be ready to-morrow morning. 

Bolivia : The report will be ready by to-morrow morning. 

Brazil : The report is to be sent to the Secretary-General to-day. 

Chile : No response. 
■ Colombia : The report will be ready at about 6 o'clock. 

Costa Eica : The rejDort has been submitted. 

Cuba : The Secretary- General has the report. 

Dominican Eepublic: No response. 

Ecuador: The report is in the hands of the secretary of the com- 
mittee. 

Guatemala: No response. 

Honduras : No response. 

Nicaragua : The report has been submitted. 

Panama : The report has been submitted. 

Paraguay : The report will be sent in at the morning session. 

Peru : The report will be made to-morrow. It is being typewritten 
now. 

Salvador : The report will be ready to-morrow. 

Uruguay: To-morrow there will be some additional copies. Ee- 
port submitted. 

Venezuela : The report will be ready to-morrow morning. 

Secretary McAdoo. I understand that the Uruguayan delegation 
desires to submit something to the Conference. 

URUGUAYAN PROPOSAL FOR A TOUR BY NORTH AMERICANS. 

Dr. Pedro Cosio (Uruguay). As the moment for closing of the 
Pan American Financial Conference in Washington approaches 
we, the delegates from the Latin American Eepublics, are able to 
appreciate the great success which has accompanied the happy in- 
spiration of Secretary of the Treasury McAdoo in having origi- 
nated an entirely new method for solving questions of material in- 
terest and of an essentially practical character. Truly I believe this 
must have struck everyone just as it struck me upon receiving the in- 
vitation to take part in this Conference, considering the form in 
which it was set forth. What occurred to me was that the idea 
was very original, yet I did not perceive in what way one could 
arrive at practical results. However, we see this now ; these meetings 
of the representative men of America are the principal means by 
which we shall secure real union of an economic and positively bene- 
ficial character for the commerce and industry of all the countries 
concerned — without taking into account the ties of friendship, which 



236 PAN AMERICAN FINANCIAL CONFERENCE. 

is one of the chief points. And so convinced am I, Mr. Secretary, 
of the successful issue of the plan suggested by the Government of 
the United States that I am going to take the liberty of adding a 
proposition which I shall submit to my distinguished colleagues, 
the Latin American delegates, in order that they may at to-morrow's 
session, if that is possible, express their assent in case they agree. 
The proposal is as follows : 

(1) That the Latin American States unite in inviting the banks 
and industrial and commercial groups here present to join together 
and visit within a period of six months the countries of Central and 
South America, where they will be received by governments, cham- 
bers of commerce, and industrial interests. 

(2) To which end the governments of the countries to be visited 
will hold it an honor to have the visitors as their guests. 

(3) Details regarding the itinerary, etc., will be fixed at the proper 
time. 

(4) That a special committee representing the States assembled 
here be formed, together with their diplomatic representatives accred- 
ited to the United States, for the purpose of taking up and carrying 
out this suggestion. 

And as a complementary measure I would suggest that the Secre- 
tary of the Treasury should appoint a United States committee 
charged with giving practical form to this idea and to organize 
the trip which is to result from it. [Applause.] 

(The Secretary-General translated the foregoing.) 

Secretary McAdoo. The minister and delegate from Bolivia, Senor 
Calderon, will address you. 

Dr. Calderon (Bolivia). I merely want to make the suggestion to 
my colleagues and delegates not to postpone the decision of this 
timely proposition presented by the delegation of Uruguay until our 
session to-morrow. I think it is a thing that will go further than 
anything else to prove how heartily and how friendly is our disposi- 
tion, and I will ask that the delegations rise and approve the propo- 
sition unanimously. 

Secretary McAdoo. Gentlemen, the suggestion from Uruguay has 
been read to you. This is not a convention. It is a conference for the 
purpose of considering suggestions, not for the purpose of taking 
action upon propositions that may be submitted. Yet this proposal 
is one that is eminently proper to be acted upon by the delegates 
from the Central and South American countries who are here. 
So, if it is agreeable to the gentlemen from Uruguay to have the 
matter put to a vote of the foreign delegates this -afternoon, I shall 
be very happy to put it. Those who favor it will say aye." 

(The suggestion was carried by a unanimous vote.) 



PROCEEDINGS. 237 

Secretary McAdoo. We have now about thirty minutes, during 
which we may consider other matters ; and as I see the Honorable 
John Bassett Moore I will ask him to come forward. It occurs to me 
that perhaps Mr. Moore may have his report ready. 

Mr. Moore. Mr. Chairman and gentlemen, we expected to have our 
report ready by this time, but, although the printer's task is not com- 
pleted, copies will be here this afternoon and will be submitted ; and 
I now have the honor, on behalf of the General Committee on Uni- 
formity of Laws relating to Trade and Commerce and an Interna- 
tional Commercial Court, to present its report, which later will be 
distributed in printed form, and which may be acted upon to-morrow. 

Secretary McAdoo. To-morrow we shall ask you to read that re- 
port, so that we may indulge in such discussion at that time as is 
proper. 

REMARKS BY MEMBERS OF THE CONFERENCE. 

We have about thirty minutes, which may be devoted to talking 
about matters which members may desire to bring before the Confer- 
ence, and several gentlemen have notified me that they would like to 
say a few words. I find six names presented here ; that would allow 
five minutes to each. I shall be relentless in dropping the gavel on 
each speaker in five minutes, I warn you in advance. 

I shall first call on the Honorable Charles H. Sherrill, chairman of 
the foreign relations committee of the Chamber of Commerce of the 
United States. 

Hon. Charles H. Sherrhl (of New York) : 

Mr. Chairman and Gentlemen or the Conference. — I feel very 
much at home in speaking to so many South Americans, because 
of the two years I spent on the banks of the Eiver Plate. And 
that moves me to say that I was much gratified when the delegate 
from Uruguay spoke, because it is most proper that he should speak 
at a conference of bankers. I may say to my North American 
confreres here that the tradition is that every girl baby born in 
Uruguay is going to grow up to be charming, and every male baby 
in Uruguay that grows up is certain to be a banker and move to 
Buenos Aires. So when the Uruguayan delegate spoke on banking 
I assure you he was congenitally prepared to do so. [Laughter.] 

I have an advantage over some of my North xlmerican colleagues 
here in that I lived for some time in South America and have enjoyed 
that exquisite hospitality which comes from the heart there, and 
which I am afraid generally comes from a studied education here. The 
South Americans are a marvelous people to live amongst and a very 
difficult people to forget. The only boast I can make of my stay in 
South America is that no North American ever came away with so 
great an affection for the people as I have. 



238 PAN AMEBIC AN FINANCIAL CONFERENCE. 

Now, one word concerning the committee on foreign relations of 
the Chamber of Commerce of the United States. All of the dele- 
gates I think by this time have learned what that organization, the 
Chamber of Commerce of the United States, means. It is a gathering 
together under a very able leader of nearly three hundred and sixty 
chambers of commerce and boards of trade all over this country. 
Those interested in it have learned many things, and there is one 
thing they have learned which seems to be very pertinent to-day ; that 
is, that the people of Texas differ more from the people of Boston 
and the people of Illinois, than do any of the South American coun- 
tries from us. 

Now, if we in this country of ours can live together happily and 
become a strong and united nation in all matters, as recently has been 
demonstrated in the field of foreign affairs, why is it not that much 
easier for those who live in a country like this to come to terms of 
understanding and agreement with gentlemen of. other countries 
like yourselves? And especially is that true when you reflect that 
we are all interested in the same part of the world, bounded about 
by the same oceans. 

A great thing was done to the whole of this hemisphere, for both 
North and South America, when that splendid mediation of the South 
American powers was made, in the misunderstanding between our- 
selves and Mexico. That caused the Latin- Americans to be appre- 
ciated and understood in North America as never before. 

Now, the action which you gentlemen are bringing about is to put 
all of our affairs which treat with the other part of this hemisphere 
on a common basis, and I think we will get together in some way, as 
was suggested in the proposal to insure neutrality of all American 
waters, so that it will be difficult, if not impossible, for the civilization 
of the other side of the world to say nay to any proposition which 
meets with the approval of both North and South America. 

The committee on foreign relations of the Chamber of Commerce 
of the United States is trying to learn all it can; and as a part of 
that education we beg that you will favor us, any of you South 
American and Central American delegates, with ideas that you may 
have. We receive suggestions from all parts of the United States, 
and we sincerely hope that before you leave you will get into touch 
with us and give us the benefit of your advice as to how to improve 
the commercial relations between this country and Latin- America, 
because that is our sphere. 

I am very much gratified to have this opportunity to salute you, 
and to say from my heart what I have felt ever since I left your 
wonderful part of the world. [Applause.] 



PROCEEDINGS. 239 

Secretary McAdoo. I shall row call on Mr. Roger W. Babson. 

Mr. Roger W. Babson (of Boston) : 

Mr. Secretary and Gentlemen. — While in South America this 
winter the shipping bill was under discussion here in Washington. 
Not having been here I can not talk intelligently about the technicali- 
ties of the bill. I do, however, feel that it would be shirking duty to 
permit this Conference to adjourn without testif}dng as to how, in 
my judgment, Pan America stands concerning the principle under- 
lying this project. Moreover, if I am incorrect, the delegates here 
can answer me. 

Let me say that I found in every country excepting one an almost 
unanimous desire that this government enter this work. The con- 
sensus of opinion seemed to be that until the seas are under inter- 
national control we will not make our shipping laws less stringent 
by permitting the use of cheap labor. Although this may be the 
solution suggested by the shipowners, I do not believe that the people 
of the United States will ever stand for this method of correcting 
the difficulty. 

The experience of these Latin American countries with subsidies 
has been very unfortunate. However large these subsidies have been, 
Germany, England, or one of their own neighbors, have outbid them 
and the value of the subsidy has been lost. The use of subsidies, I was 
told by Latin American officials, consists in giving one larger than is 
given to the ships of competing nations. There seems to be no value 
to subsidies when the nations begin to bid against one another, which 
is the inevitable result under present conditions. My Latin American 
friends also complained bitterly of the deteriorating effects of subsidy 
legislation on all other legislation, as it greatly opened the door to 
graft. 

Hence until all shipping engaged in foreign trade is under uniform 
laws and flies an international flag the only other means of building 
up a merchant marine is by the use of government-owned ships. 
This is not merely theory, but is the result of practical experience 
with all the different systems as used by the Latin American coun- 
tries. In fact, the president of one of these countries asked me, 
" Can democracy lead to any other solution ? " 

As to the great need of better shipping facilities between the two 
Americas there is no chance for argument. In talks which I had 
with the highest officials of all those countries they unanimously 
emphasized this point. 

Perhaps the President of Argentina best expressed the thought by 
these words : 

The first step toward bringing any peoples together must be better means of 
communication, and this especially applies to the nations of the Western 
Hemisphere. 



240 PAN AMERICAN FINANCIAL CONFEEENCE. 

The President then showed me a report of his government on the 
ships which arrived last year in Argentine ports. This list contained 
statistics on the ships of about twenty nations; the United States 
comes third from the end, followed only by Mexico and one country 
whose name I am ashamed to mention. 

Gentlemen, before going to South America I was opposed to gov- 
ernment-owned merchant marine, but I am now convinced that it 
is an absolute necessity for cementing together the Americas. I 
therefore beg. of you, my fellow countrymen, who are official guests 
at this Conference, not to oppose this principle without first going to 
Latin America and studying its needs. 

Do you know that our methods are incomprehensible to Latin 
America ? We bring these Latin Americans here to the United States 
and show them our great wealth; we tell them in eloquent speeches 
of our great love for their countries and peoples ; but as soon as we are 
asked by their governments, or even our own government, to spend 
money on these professed bonds of friendship, we run away. 

The time has come when we should either "put up or shut up." 
Let us flirt with these Latin Americans no longer! Let us either 
cease our caressing words or else show our faith by works. This 
means let us buy their bonds, help them in financing their public 
works, organize banks which will lend money to their people, adapt 
our manufactured goods to their needs, and, most important of all, 
adopt the suggestion of President Wilson and. Secretary McAdoo 
by building ships which will make possible that interchange of peo- 
ples and goods which is fundamental to the growth, prosperity, and 
happiness of the Americas. 

In other words, let us not be hypocrites ! [Applause.] 

Secretary McAdoo. I want to compliment Mr. Babson on being able 
to write an exactly five-minute speech. He hit it to a second. 

The next speaker is the Honorable J. Van Vechten Olcott, president 
of the Pan American States Association. 

Hon. J. Van Vechten Olcott (of New York) : 

Mr. Chairman and Delegates. — I promise I will not use the five 
minutes. I want first to thank the Secretary of the Treasury for 
his graciousness in inviting me to this Conference. It is only in 
the last month or so that I have been elected president cf the 
Pan American States Association. This association has existed for 
about three years and has had merely temporary quarters, our pres- 
ent quarters being in the McAlpin Hotel, in New York. We are 
rather ambitious as to what we expect to do. We believe that within 
the next few years we will have erected a building in the city of 
New York of which the major portion will be used for perma- 



PROCEEDINGS. 241 

nent international exposition purposes. We believe that the South 
American countries will bring us samples of the goods that thej r 
have to sell to us, and we believe that the American manufacturers 
will show a very hearty cooperation by exhibiting what we have 
to sell. This building, which I can state now conservatively is prac- 
tically financed, will be as tall as the Woolworth Building, in New 
York. There will be something like forty stories to it. Most of 
them will be used for exhibitions and expositions, and the remaining 
twelve, fifteen, or sixteen stories will be used for club purposes. 

We have the cooperation of this present administration. At the 
suggestion of the President of the United States the collector of the 
port of New York, a very able subordinate of the Secretary of the 
Treasury who is presiding here, is a member of the advisory board. 

The matter that I wanted particularly to speak to you about, the 
reason I am glad to be here as a guest, is to tell you that we hope 
before you gentlemen go to your own countries you will not fail to 
visit our temporary quarters and become interested in our project. 
Before you leave the city of Washington you will receive special in- 
vitations from the society asking you to come. 

I do not want to go in detail into the purposes of the society, ex- 
cept to say that they are entirely commercial, and I wish to say that 
the name of our association probably may be changed to the "All 
Americas Association." I would like to add, also, that we are entirely 
in accord with the union of which Mr. Barrett is so happily the 
head. We are also, at present, in harmony with the administration 
here, and I am perfectly certain we will always be so. As the presi- 
dent of the association, I ask you when you come to New York to 
come there to the McAlpin Hotel, where, as I say, we are tempo- 
rarily occupying a considerable suite of rooms, and see for your- 
selves what we are starting to do. I think you will then believe that 
we will accomplish even our ambitions and large desires. When you 
come, I am sure that we will give you as warm a welcome as we 
know how, and we will try to vie with the character of welcome my 
friend Mr. Sherrill says that you in South America give to visitors 
from our country. 

I thank you. [Applause.] 

Secretary McAdoo. I am afraid my good friend Mr. Olcott made 
one statement that might lead to a wrong inference, and I know he 
did not so intend it, when he said that what he was doing was in 
accord with the administration here. I do not know whether he 
meant the national administration or not, but, of course, this ad- 
ministration can not put its approval upon any private project, and 
98257°— 15 — -16 



242 PAN AMERICAN FINANCIAL CONFERENCE. 

I feel assured that Mr. Olcott did not intend to create such an im- 
pression. 

Mr. Olcott. I beg pardon. I did not mean any such inference. 

Secretary McAdoo. I know you did not mean that, but such an 
inference might be drawn from your statement. The administra- 
tion can net put its approval upon any project of that character, 
however worthy it may be. 

The next gentleman who will address you is Mr. A. W. Ted- 
castle. 

Mr. A. W. Tedcastle (of Boston) : 

Mr. Chairman and Delegates to the Conference — I have been 
accorded a very few minutes to call attention to an evil and suggest 
a remedy in the matter of tax on salesmen and a tax or tariff on 
salesmen's samples. 

Salesman's tax. — The present tax in most Eepublics is so high that 
many manufacturers are deterred from making experimental trips. 
I would suggest that if the charge was reduced to a reasonable sum, 
and one payment to cover all cities in the Eepublic, the additional 
number of travelers would more than make up the amount now col- 
lected from a few. 

Tariff or duty on samples and remedy suggested. — The present 
plan of charging duty on such samples as boots and shoes, even 
where the duty is returned, is so unsatisfactory and expensive that 
my firm, in common with many others, has found it necessary to 
destroy or mutilate many hundred dollars' worth of samples each 
year so that they may be entered duty free. We are thus put to 
large pecuniary loss and do not feel able to show as full a line of 
merchandise. For this loss to us the Eepublics get no compen- 
sating advantage ; instead, the reverse. I would respectfully suggest 
as a remedy that each Eepublic allow salesmen to deposit with the 
customs authorities a bond issued by some reputable bonding com- 
pany in the United States, said bond to be a guaranty that the 
samples will be taken out of the Eepublic. Bond to be returned to 
the salesman when such samples have been delivered to the customs 
for reshipment. 

I do not know how our friends south of us could aid the manu- 
facturers and merchants of the United States more, and at no ex- 
pense to themselves, than by giving this matter their earnest atten- 
tion; and in addition to that I wish to emphasize the fact that if 
two or three Eepublics should fail to do it, then either the salesmen 
would pass those Eepublics by or would have to continue losing 
money by mutilating samples and rendering them valueless. 

I leave the matter with you and thank you for your attention. 
[Applause.] 



PROCEEDINGS. 243 

Secretary McAdoo. Mr. William C. Le Gendre will now say a 
few words. 

Mr. "William C. Le Gendre (of New York) : 

Mr. Secretary and Gentlemen, of the Conference — I will take 
but a moment of your time. In casting about, in planning the 
American shipping bill, I ran across some information, and will 
quote the following in the case of Captain Dollar, of San Fran- 
cisco. This gentleman owns both United States and foreign ves- 
sels. He has stated that in a single instance, in taking a ship 
from foreign registry and putting it under the American flag, it 
necessitated the employment of four additional quartermasters at 
$70 a month, an extra engineer at $70 a month, three water tenders 
at $75 a month (and, incidentally, nobody seems to know what a 
water tender is on a foreign ship). The total additional cost was 
$680 a month, or $8,160 a year, simply for changing the flag on that 
ship ! In addition, there is the difference in cost for tonnage dues 
entering every port, based on a very much larger tonnage measure- 
ment under the American flag. The total difference in cost of oper- 
ating that ship would closely approximate $12,000 a year. Is there 
any use for an American who can own ships and operate them under 
the English flag, for instance, to put them under the American flag 
and pay that additional amount? Is not this the reason why we do 
not get American ships? It seems to me that this statement sums 
up the whole question. It might not be amiss to add that a person 
more expert and better informed than I could add further expense 
in respect of port dues and other charges incurred in loading and 
unloading. [Applause.] 

Secretary McAdoo. The next speaker will be Mr. William S. Kies, 
of the National City Bank. 

Mr. William S. Kies (of New York) : 

"Mr. Secretary and Gentlemen of the Conference — This Confer- 
ence is proving an inspiration to the business interests of the 
United States. You distinguished gentlemen from Central and 
South America have impressed us deeply by your sincere patriotism 
and j^our broad vision. The picture which you have given us of 
the Americas united, bound together by ties of commercial friend- 
ship, will not soon fade. 

We in this country have been organizing for a number of months 
in order better to prepare ourselves for the responsibilities which 
must be ours in this movement for extending our trade relations. 
We are beginning to realize how great has been our ignorance of 
some of the fundamentals of foreign commerce and how much is 
necessary in the way of education on our part. Close business rela- 



244 PAN AMERICAN FINANCIAL CONFERENCE. 

tions are in all cases founded upon mutual confidence and respect, 
and, of necessity, must be preceded by mutual acquaintance and 
understanding. You have invited us to take, to a certain extent, the 
place in your business world formerly held by the unhappily 
estranged nations of Europe, but £ou have known and done business 
with Europe for many decades ; and Europe, through its associations 
and its business experience with you, has a more thorough under- 
standing and appreciation of the demands of your markets, of the 
nature of your institutions, and of the sterling characteristics of 
your peoples, than we can as yet hope to have. 

The most important element in the development of commercial 
relations is the extension of credits. Fortunately for this country, 
under the provisions of the Federal Reserve Act we now have the 
financial machinery making possible a free extension of credit in aid 
of the importation and exportation of goods. The liberal use of 
these credit facilities depends only upon the rapidity with which we 
become acquainted. To speak with entire frankness, in the United 
States the merchant who wishes to borrow presents from time to 
time to his bankers an accurate statement of his financial condition. 
The bankers of this country habitually interchange credit informa- 
tion. If a merchant in the United States, therefore, is desirous of 
knowing the credit standing of a possible customer anywhere in the 
country he may ascertain the facts on short notice. The extension of 
credit only after a thorough knowledge of a concern's financial con- 
dition is obtained through such channels. That has become a fixed 
business habit with us. 

We must, therefore, gentlemen, ask your earnest and sincere aid 
in this matter of credit extension. We have heard from many sources 
of the high sense of business honor obtaining among your leading 
firms, but it is always true that a man to be thoroughly appreciated 
must be personally known. We desire sincerely to know you better. 
May we not count on your help in this matter ? Through your com- 
mercial organizations, and through such permanent committees as 
it is hoped may grow out of this great Conference, will you not co- 
operate with us by urging upon your merchants and your business 
men the desirability of giving to such United States banks and to the 
representatives of such commercial interests as may be located in 
your respective countries, full and complete information regarding 
their responsibility and financial standing? Our merchants, I can 
assure you, will be equally frank, and our banks and our credit 
organizations are even now prepared to give to your merchants in- 
formation in complete detail concerning the commercial houses in 
this country who may wish to do business with you. 

This Conference will produce results lasting and permanent if 
there shall develop from it a sincere and earnest spirit of cooperation 



PBOCBiDtsm 245 

for a permanent movement toward mutual education and acquaint- 
ance along commercial lines. 
I thank you, gentlemen. [Applause.] 

(At this point the Honorable Lindley M. Garrison, Secretary of 
War, entered the room amid applause.) 

Secretary McAdoo. Gentlemen, I have the very great pleasure of 
announcing that our distinguished Secretary of War has been 
courteous enough to extend to you an invitation to visit Fort Myer 
and witness a drill. Before doing so, I have asked him if he will 
not say a few words to you. It gives me the greatest pleasure to 
introduce him to you now — the Honorable Lindley M. Garrison. 

INVITATION BY SECRETARY OF WAR. 

Secretary Garrison. Mr. Secretary, ladies and gentlemen: This 
Conference undoubtedly marks the beginning of a new era in the 
Western World. It constitutes a new chapter in the modern history 
of the Americas. It is a family council to devise ways and means 
to benefit mutually the members of the family. 

It must be a source of personal gratification to you gentlemen to 
have had the opportunity of taking part in this great work. I 
felicitate you upon that happy chance and also upon the way in 
which you have taken advantage of it. The atmosphere generated 
by you is charged with the electric quality of success; and with the 
spirit here prevalent, failure is impossible. You have attended the 
birth of a movement which has incalculable potentialities and bene- 
fits to the peoples of all the countries involved, and the good effects 
of which will endure from generation to generation. 

I am very much pleased to have been afforded the opportunity of 
meeting you and of saying these fews words to you, and to have the 
further opportunity of being permitted to offer you a little rest and 
diversion. I am to have the honor of having you accompany me to 
Fort Myer, a near-by military post, where we will witness some 
cavalry evolutions. [Applause.] 

Secretary McAnoo. Now, gentlemen, it is my very great pleasure 
to transfer you to another gentleman who will be your host. I am 
always sorry when I have to surrender you to somebody else because 
I enjoy you very much myself, but I must not be selfish about this 
matter. So I am now going to turn you over to the Honorable 
Secretary of War, and I know he will take good care of you. 

Gentlemen, the meeting will now adjourn and you will find auto- 
mobiles at the door to take you to Fort Myer. 

(Accordingly, at 4 o'clock p. m., the Conference adjourned.) 



SIXTH SESSION 



SATURDAY MORNING. MAY 29, 1915 



247 



SIXTH SESSION, SATURDAY MORNING, MAY 29. 



The Conference was called to order by the Honorable William G. 
McAdoo at 10 o'clock a. m. 

The Secretary of State, the Honorable William Jennings Bryan, 
and members of the Federal Reserve Board were invited and pro- 
ceeded to take seats upon the platform. 

Secretary McAdoo. The Secretary-General desires to make certain 
announcements before we proceed with the business of the Confer- 
ence. 

GENERAL ANNOUNCEMENTS. 

The Secretary-General, Dr. Rowe. Gentlemen, I desire to repeat 
the notice given yesterday that owing to the fact that some of the 
representatives from the United States did not register we were 
unable to secure their accurate addresses; and I desire further to 
state that all of these gentlemen have been invited to the banquet 
this evening. If you have not received an invitation it is due to our 
not having your address in Washington, Therefore please indicate 
on a visiting card before you leave this morning whether you will 
attend or not. This will enable the proper arrangements to be made. 

For the purpose of record in the minutes I would like to say that 
Mr. John Clausen, of the Crocker National Bank, San Francisco, 
has submitted a memorandum to the Conference. 

Secretary McAdoo. I wish to announce that the President will be 
very happy to receive the members of the Conference at the White 
House at 12.30 o'clock to-day for the purpose of bidding them 
good-by. You will be good enough to enter through the east gate, 
opposite the Treasury Building, as you did on the previous occasion. 
The session will adjourn in time to enable you to go to the White 
House. 

I regret very much to say that the reports of the group committees 
were not handed in in time to be printed by this morning. The work 
upon them is being rushed as rapidly as possible. I wish to say also 
that I think the group committees have done admirable work in 
getting their reports ready so soon. You have all been under very 
great pressure this week in trying to compress into a comparatively 
short time matters of vital importance. The result is it will not be 
possible this morning to deal with these committee reports in the 
form which we should have chosen had we had more time. I would 
suggest, therefore, that later during the morning the roll be called, 
so that representatives of each one of the countries may address the 

249 



250 PAN AMERICAN FINANCIAL CONFERENCE. 

Conference on the subject. These remarks will have to be very- 
brief, but an opportunity will thereby be given each country to make 
some general observations upon the character of its report. 

The reports will be printed and distributed later, and will be in- 
corporated in full in the published proceedings. 

I shall now ask the Honorable John Bassett Moore, in connection 
with the report from the Committee on Uniform Laws, kindly to give 
us a brief outline or summary of the conclusions of the group reports ; 
and after that has been done I shall ask each delegation to express 
itself in such way as it may see fit. 

We shall be glad to have Mr. Moore make that report now. 

GROUP REPORTS SUMMARIZED. 

Mr. Moore. Gentlemen, as the president of the Conference has 
stated, a great deal of work has been devoted to the preparation of 
these group reports. Although I have been connected with a number 
of conferences, I have not known any whose members applied them- 
selves more constantly and assiduously and devotedly to the per- 
formance of their duties than have the members of this Conference. 
It may be said that they have dined while they worked and worked 
while they dined. They have worked all of the time. 

A few of the delegations presented written suggestions to the Sec- 
retary of the Treasury on their arrival here. Those papers have been 
printed and are in your hands. A few of the reports of the group 
committees — three or four — have been printed. A number — I should 
say seven or eight additional reports — have been handed in in manu- 
script. Others probably will be submitted in the course of the day. 
As the president of the Conference has stated, those that have been 
presented within the past twenty-four hours in manuscript have been 
turned over to the printer. 

I have undertaken to make a brief summary of the group reports 
so far as they have been received. 

The report of Bolivia presents a full review of the financial condi- 
tions and trade and commerce of that country, including its natural 
resources, particularly its minerals, rubber, timber, fruit, and live 
stock. It also deals with the question of railway extension and trans- 
portation, ocean and interior, and with the monetary situation-, bank- 
ing and finance. It suggests the organization of a central commer- 
cial agency in connection with or under the supervision of the 
United States Chamber of Commerce. 

The group report of Chile recommends the adoption by the various 
countries of legislation; first, to facilitate the drawing of bills of 
exchange upon one another by the financial institutions of South 
American countries and the financial institutions of the United 



PROCEEDINGS. 251 

States; second, to make bonded warehouse warrants and receipts 
available as collateral security for the development of international 
commerce. It recommends the advisability of permitting the pay- 
ment of such part of the export duties on nitrates from Chile to the 
United States (such parts as are now paid in 90 days sight drafts, 
sterling on London), in 90 days sight drafts in dollars on New York, 
at such rates of exchange as may be periodically fixed by the Chilean 
authorities ; also, that such changes be made in the laws of the United 
States as will enable bankers to extend their credit discount and re- 
discount facilities so as to conform to the trade customs and necessi- 
ties of Latin America. It also recommends that a permanent inter- 
American commission be established to study commercial problems 
and conditions. 

The Colombian delegates have submitted to the Conference com- 
prehensive pamphlets dealing with the financial and economic situa- 
tion in that country and with the question of public works. They 
recommend, first, special committees for each country, similar to 
those appointed in connection with this Conference; secondly, the 
cooperation of those committees in financial and commercial matters ; 
third, the consideration of the establishment of a general executive 
council to meet in Washington at least once a year ; fourth, the con- 
sideration of the appointment of a board of engineers to investigate 
projects which require financing. 

The report of the Costa Rican group gives a full survey of the 
public finances of that country, its monetary situation, banking situ- 
ation, and financing of private enterprises. It emphasizes the im- 
portance of longer credits to the extension of inter- American mar- 
kets. The subjects of merchant marine and improved transportation 
facilities are very fully covered. 

The report of the Cuban group, after a study of commercial rela- 
tions, recommends that the high duties that hamper the importation 
of Cuban tobacco into the United States be ameliorated, and, in 
view of the abolition by the United States of import duties on sugar, 
that the principle of the reciprocal reduction of duties be extended 
by treaty stipulations, in addition to those that already exist, so as 
to preserve the principle of reciprocity as the foundation of trade 
relations between the two countries. This report also deals with 
the question of transportation and with those of the parcels post, 
the extension of credits, and the sending out of expert commercial 
travelers with samples. It also urges the making uniform, so far 
as may be practicable, of commercial laws and the extension of the 
system of arbitration for the settlement of commercial disputes. 

The report of the Dominican Republic reviews the present state 
of the public finances in that country and suggests remedies for 



252 PAN AMERICAN FINANCIAL CONFERENCE. 

present inconveniences. Particularly it advises a reduction of the 
duties on Dominican tobacco in the United States and the making 
of an adequate reciprocity treaty between the Dominican Republic 
and this country. The present banking situation and the extension 
and liberalizing of banking facilities are dealt with ; also the financ- 
ing, first, of public improvements, and, second, of private enter- 
prises. There is, besides, a discussion of the extension of inter- 
American markets, while the development of the merchant marine 
and the improvement of transportation facilities are emphasized. 
Attention is drawn to the desirability of modifying the existing postal 
conventions in these particulars : First, the extension to the countries 
embracing the Pan American Union of the same letter rates as now 
exist between the United States, Cuba, and Mexico; second, the ex- 
tension to those same countries of the same rates of newspaper post- 
age as exist in the United States; and, third, the adoption by the 
same countries of uniform service for postal money orders and 
parcels post. 

Conditions in Ecuador are very fully presented in a memorandum 
delivered to the president of this Conference before it met. The 
memorandum is full of suggestions as to the work that might prop- 
erly be undertaken by this Conference. These suggestions are 
grouped under 11 heads, and in all embrace 32 different topics, and 
I may say that this paper was very useful in the work of the sub- 
committee of the committee on uniform laws. 

The report of the Guatemala group contains a review of financial 
and commercial conditions of that country. It recommends: First, 
that practical demonstrations be given in Guatemala of agricultural 
machinery and tools made in the United States ; second, that the at- 
tention of American manufacturers be drawn to the opportunity 
for the use of portable sawmills in cutting the woods of the country, 
and of improved sugar-cane machinery; third, that the shipment of 
wares be made in packages suited to the transportation facilities or 
requirements in the various countries; fourth, that the American 
manufacturers maintain in Guatemala City a permanent exhibition 
of their products ; fifth, that a uniform postal system throughout the 
Americas be adopted ; sixth, that there be a uniform classification of 
articles for the purpose of levying customs duties; seventh, that 
American merchants grant credits of not less than 90 days for the 
payment of purchases ; eighth, that expert agents be sent out to sell 
goods; ninth, that facilities be afforded in American schools for 
young men from Latin America; tenth, that increased attention be 
bestowed in Latin American countries upon the study of political 
economy, finance, and business questions in the schools; eleventh, 
that professors and students be interchanged ; twelfth, that the teach- 
ing of Spanish and of courses in the history and geography of Latin 



PROCEEDINGS. 253 

America be more generally provided in the United States ; thirteenth, 
that chambers of commerce be more generally established; and, 
finally, that the improvement of transportation facilities, the appoint- 
ment of consulting commissions in each country, and the extension 
of banking facilities, be always borne in mind. 

The report of the Nicaragua group, which is in type and which 
has probably reached your hands by this time, reviews the political, 
commercial, and financial condition of that country, describes its 
natural resources, emphasis the importance of improving banking 
facilities, draws attention to the fact that Nicaragua is a promising 
field for the investment of capital, and recommends a ratification by 
the United States of the pending treaty between thb two countries. 

The report of the Panama group makes recommendation in regard 
to the acceptance by local banks and dealers of coupon books issued 
by the Panama Canal Company, in the purchase of commodities, and 
certain changes in the practices of the commissaries owned directly or 
indirectly by the United States. It also recommends that dis- 
criminatory freight rates of the Panama Railroad Company be abol- 
ished; and that the use of the canal for transportation between the 
ports of Panama and Colon be secured freely. It also recommends 
that the Federal Reserve Board open branch banks in North, Central, 
and South America ; that shipping facilities be improved ; and that in 
sending out quotations or prices and in the drawing of drafts, com- 
putation be made upon the United States dollar. 

The report of the Salvador group emphasizes the lack of com- 
mercial treaties between that country and the United States. It 
recommends the establishment of a chamber of commerce in Salva- 
dor; it strongly urges cooperation of banking institutions in estab- 
lishing reasonable credits ; and, lastly, the exchange of students and 
the wider dissemination of commercial and agricultural information. 

The report of the Uruguay group deals, first, with the improve- 
ment of transportation — (a) by abolishing discriminatory duties, 
and (b) by granting direct or indirect subsidies to shipping, or 
both; second, with the adoption of the metric system of weights 
and measures, and meanwhile the making up prices, invoices, and 
bills of lading in the metrical unit. Thirdly, it urges that cheaper 
cable rates be secured, and that the governments undertake, in co- 
operation, the development of wireless telegraph systems. The 
report recommends the establishment of an international monetary 
unit and of improved banking facilities, the granting of more 
liberal credits, and the adhesion of the North American countries to 
the South American postal convention of Montevideo of June, 1910. 
The report further recommends the making of reciprocity arrange- 
ments ; the interchange of students ; and, lastly, the decrease of duties 
on the necessaries of life and the adoption of progressive taxes on 



254 PAN AMERICAN FINANCIAL CONFERENCE. 

inheritance, and also the cooperation of the governments forming 
the Pan American Union in devising and in enforcing measures to 
overcome frauds in these particulars. 

This, gentlemen, is a summary of the group reports in so far as 
they have been received up to the present moment. 

Secretary McAdoo. I shall now ask the Secretary-General to be 
good enough to call the roll of the different countries, so that we 
may have such remarks as the delegates may care to make upon the 
subject of these reports. I may say that after the roll call a report 
will be called for from the Transportation Committee and also from 
the Committee on Uniform Laws. 

Mr. Moore. I beg pardon, Mr. Chairman ; I find that I have over- 
looked the very full Brazilian report that has been presented. This 
report deals with the financing of transactions involving the impor- 
tation and exportation of goods, with question of local and 
commercial banking and with the various questions of trade 
and of commerce. It recommends in particular first, that 
greater prominence be given in the public schools and other 
educational institutions of the United States to the study of the 
Central and South American countries, their geographical loca- 
tion, natural resources, government, and languages ; second, that em- 
phasis be given to the necessity of greater liberality being exercised 
in the interpretation of customs regulations by the United States 
and Latin America, especially with respect to the free entrance or 
drawback of duty on travelers' samples or other samples intro- 
duced into the respective countries solely for the purpose of pro- 
moting trade. It accentuates, in the third place, the necessity of 
the more effective protection of trade-marks; fourth, the facili- 
tation of reciprocal business relations between merchants and 
manufacturers of both nations, the granting of such reasonable 
credits in both directions as may be safe and desirable, and the 
establishment of trustworthy means whereby merchants and manu- 
facturers of either nation can determine with reasonable accuracy 
the financial responsibility of the purchasers of the other; fifth, the 
establishment is recommended between the United States and Latin 
American countries of a system of direct exchange based on the 
dollar unit of the United States; sixth, in order to facilitate the 
interchange of products adapted to the needs of American countries, 
it recommends the formation of bureaus of standards of the re- 
spective countries to standardize, in so far as possible, the require- 
ments of each country, and recommends to the manufacturers and 
purchasers of the several countries the immediate recognition of such 
standards and corresponding weights and measures; seventh, atten- 
tion is drawn to the favorable results which have followed the grant- 



PROCEEDINGS. 255 

ing by Brazil and Cuba of preferential duties applying to certain 
products of the United States, and the extension of reciprocal tariff 
concessions between the Latin American countries and the United 
States is strongly urged; eighth, it emphasizes the extreme need of 
rapid, frequent, and dependable marine transportation service to 
provide adequately for the maintenance and development of com- 
merce between the countries of North and South America; ninth, 
recommends that the postal rates now existing within the United 
States be extended to include the Latin American countries and 
made reciprocal, and that it is of the very greatest commercial im- 
portance that a parcels post and money-order system be generally 
established ; tenth, urges the extension of direct telegraphic service, 
either wireless or cable, between all parts of North, Central, and 
South America, to be owned, controlled, and operated by exclusively 
American interests; eleventh, recommends to the press of all the 
interested countries that a more comprehensive and reliable system 
for the exchange of important news items be established. 

Secretary McAdoo. I ought to say to the Conference that the rea- 
son Mr. Moore has not been able to summarize all the reports is that 
some have not yet come to the Secretary-General. When those coun- 
tries are called I should like their representatives to give a brief out- 
line or a lengthy outline, as they choose, of their reports. 

(Hereupon the roll was called.) 

REMARKS IN CONNECTION WITH GROUP REPORTS. 

Argentina (Dr. Aldao) : Argentina will have to wait until her 
report is in. 

Bolivia (Dr. C alder on) : As the result of our conferences we can 
see that there are certain things which it is the duty of all countries 
to decide, such as banking facilities for the benefit of the different 
interests of the countries. 

Another point on which everybody seems to be in agreement is the 
subject of the liberalization of laws concerning the acceptance of 
samples, the reduction of the taxes on the men that go to sell, the 
facilitation of commerce, and, finally, the development of merchant- 
marine. It would be useless to try to establish without a merchant 
marine any commerce or interchange of business between the coun- 
tries. 

There is another point, more of future interest, which the Bolivian 
delegation has thought necessary to point out, and that is the estab- 
lishment of an agency under the supervision or the direction of 
the Chamber of Commerce of the United States. This cham- 
ber represents almost all the organizations of the country. The 
different reports submitted here will have no effect if there is not a 



256 PAN AMERICAN FINANCIAL CONFERENCE. 

central agency where all these things could be gathered together. In 
Bolivia, for instance, there is need for the establishment of sanita- 
tion, for the construction of sewerage, and for other public necessities. 

For example, in the proposal to construct a railroad, one could use 
that central agency for information from which he could learn not 
only of the facilities, but where to go and with whom to deal ; and at 
the same time it would be possible for the people of the United States 
interested in that project to hear that the necessity existed. To-day, 
for instance, anybody coming from Latin America to make purchases 
in the United States has to go to firms already well known. The 
person coming to make such purchases may find himself absolutely 
in the hands of a speculator who might not always be looking to the 
interest of the country, but to his own. If we could have a central 
agency, that agency would notify the firms in the United States 
dealing in those special lines that such and such a country was in 
the market, and thereby competing bids would be received, and it 
would be perfectly easy to ascertain where to place those contracts 
here with all assurance of their being honestly carried out, I can 
give an illustration. When I first came to the United States it was 
for the purpose of contracting for railroad construction in Bolivia. 
I did not know to whom to go ; I did not know how to commence the 
undertaking; but, fortunately, I struck a man who realized the pos- 
sibilities of the plan and also was able to help with capital, and in 
spite of fear of touching the modesty of Mr. Vanderlip I would say 
he was that man. [Applause.] I was thereby enabled to deal with 
a firm capable of carrying out this contract, and when I made it I 
could say to my Government, "Here is an agreement made in the 
United States that will be carried out to the letter on their part ; if 
we will perform our part they will perform theirs." That contract 
has been carried out during the last nine or ten years. What has been 
happening in other countries? They have lost thousands of dollars, 
and the United States has lost many contracts, because they have 
been undertaking their own work. The Latin American countries 
have no means to carry this out, and many of those with whom they 
attempt to deal try to speculate, to the disadvantage of the country. 
Therefore the establishment of such an agency, in the minds of the 
delegation of Bolivia, is a very necessary thing to insure the proper 
fulfillment of any obligations we may make here, and to afford a 
central point where we may go to acquire the information needed. 
I do not wish to take any more time of the Conference, but I wanted 
to call attention to this subject, which seems to be of sufficient impor- 
tance to be taken into consideration and discussed. 

Brazil (Dr. Cavalcanti) : Mr. Secretary of the Treasury and 
gentlemen: Before you make your closing address may I be per- 
mitted to state that I am returning home very glad to be able to say 



PROCEEDINGS. 257 

that the lofty purpose you have had in calling this Pan American 
Financial Conference has proved quite justified. Indeed, in the short 
time of a few days — but, fortunately, under your competent and 
highly intelligent leadership — the Conference has been enabled to 
reach its principal end — that is, to establish proper bases, upon which 
one can rely, with regard to the increasing and improving of the eco- 
nomic and financial intercourse between all the American Bepublics. 
Brazil, here represented by me, congratulates you and your govern- 
ment upon this deserving achievement. Let us, then, all of us, work 
in that direction ; let us work in the spirit of common interest ; let us 
work in the spirit of justice, peace, and fraternity ; let us work finally 
on the behalf of the progress, development, and growth of all of our 
countries, and success can not fail to be the final result of our aims, 
endeavors, and efforts. [Applause.] 

Chile (Dr. Izquierdo) : Mr. Chairman and gentlemen, after the 
statement of the Honorable John Bassett Moore we believe there is 
not much more to add to our report. This report refers to the 
transportation problem and to the means of providing certain fa- 
cilities for banking. I believe the reading of it will give sufficient 
information. 

We have only to thank the Secretary of the Treasury for the 
trouble he has taken for us in this Conference and to express 
our appreciation of the many courtesies offered us while here. 
[Applause.] 

Colombia (Dr. Ancizar) : Mr. Secretary and gentlemen, the sug- 
gestions made by the committee of Colombia are more or less the same 
as those made by the Committee of Bolivia, and as the explanations 
given by Senor Ballivian, of Bolivia, apply, I really have nothing 
special to add. I only wish to thank you, Mr. Secretary, in behalf 
of Colombia for the efforts made to assure the success of this Con- 
ference and for the courtesies extended. [Applause.] 

Costa Rica (Dr. Guardia) : I have nothing special to say. My 
report explains itself. 

Cuba (Dr. Desvernine) : Mr. Secretary and gentlemen, I want to 
say that we have already, according to your suggestion, submitted a 
report, and there will be a memorandum, which we have made a 
source of general information on the matters we were to deal with. 

We did not go at great length into the subjects under considera- 
tion because we have only had four sessions of about an hour and a half 
or two hours each on a program of which we were notified only 
when we arrived in Washington, and we understood also that in 
view of the little time we had in which to make a statement of our 
views and because of the varied program given us it was supposed that 
what was expected from us was a simple statement of the Group 
98257°— 15 17 



258 PAN AMERICAN FINANCIAL CONFERENCE. 

Committee's conclusions. That is why we have made only a very 
short report, in which I hope that all the essentials in regard to the 
relationship between Cuba and the United States and with the 
other sister Eepublics are hinted at if not expressed as fully as they 
should be. 

This is perhaps the last chance I personally shall have to see you, 
but I do not want to go back to my seat, much less to my country, 
without expressing to you our profound gratitude for your kindness, 
for your assiduous assistance and leadership in this Conference. I 
also wish to offer our respects to the President of the United States 
and to the Honorable Secretary of State, Mr. William Jennings 
Bryan, who has given us not only the pleasure and the hooor of his 
presence here but also his cooperation and help. [Applause.] 

Dominican Republic (Dr. Peynado) : Mr. Chairman and gentle- 
men of the Conference, our Group Committee report has already been 
presented. We therefore wish merely to express our great apprecia- 
tion of your courtesy and our hope for the success of the work that 
shall come from this Conference. 

Ecuador (Dr. Gonzales) : Mr. Secretary and gentlemen of the 
Conference, the report of Ecuador has just been handed to the Secre- 
tary-General. It was framed according to the questions submitted 
in the program, and in addition it has the honor to present thirty-two 
subjects for discussion. Unfortunately the time has been so short that 
it was not possible to take these matters into account. I should like, 
however, to ask the Conference to take some action on a very im- 
portant point which has been absolutely disregarded. It is on the 
subject of banking. What is the use of attempting to establish 
branches in Latin- American countries, which we desire and which 
this country desires to establish, if there is no law providing for 
them ? So far as I know, there is not a single law in South America 
or in Central America whereby branches of foreign banks have been 
given any legal status in those countries. They are tolerated, they 
are permitted, but they are not regulated by law. I think it would 
be very important to recommend to the different Governments the 
adoption of such legislation as would be suitable to each one tending 
to give the branches of foreign banks a legal standing. The same is 
true in regard to foreign corporations. I have had some experience 
of that in New York, and I have seen the troubles which arise every 
day there through the lack of provisions in Latin- American countries 
in regard to the standing of foreign corporations. 

With regard to money, we are requested to recommend the adop- 
tion of the gold standard to the Committee on Uniform. Laws. We, 
however, advise the advantage of forming a Pan American money 
union, so that the currency of each country may circulate in the 
others under certain restrictions. Also, the listing in this country of 



PROCEEDINGS. 259 

the securities of Latin American countries. Thus far Europe has 
been the market for Latin American securities. These securities have 
not been floated in the United .States. Many of them might find a 
market here if the people knew something about them. 

There are other recommendations, Mr. Chairman, that I will not 
take the time to present now, but I think that these remarks, together 
with the report of the delegation, will surely be of some benefit later. 

I wish to take advantage of this opportunity to thank various per- 
sons, especially the group committees, for the attention they have 
given and the pains they have taken with each one of these subjects. 
The American business man is considered all over the world to be a 
very selfish creature, but I think he has given us proof of something 
entirely different. These gentlemen whose time is very valuable, 
sometimes worth many thousands of dollars per hour, have sacrificed 
one whole week of their time to listen to us, expecting nothing from 
it but the common good of all. [Applause.] 

Guatemala (Dr. Sanchez Ocana) : Mr. Chairman and gentlemen, 
we, the delegates from Guatemala, have just listened to a summary 
of the recommendations submitted by the Guatemala Group Commit- 
tee report to the Conference and have nothing to add to it. We 
desire, however, to avail ourselves of this opportunity to express once 
again our thanks to the Government of the United States for the 
kind invitation extended to the Government of Guatemala to be rep- 
resented here. We congratulate the Secretary of the Treasury for the 
great success his efforts have had, and we beg him to convey our con- 
gratulations to every official of this Republic. During these days of 
unremitting effort the seed has been sown, we believe, which will most 
certainly bear much fruit, as the various suggestions formulated at 
this time are carried into effect. On the Treasury Department of this 
country will rest the duty of taking up the needs and conditions as 
they have been outlined here, and of giving them practical shape, 
which will conform to the lofty purposes that this government had in 
view in calling the Conference together and the other governments of 
this continent had in attending. 

We desire to offer our thanks to the Honorable Secretary of State 
and the Secretary of the Treasury for the gracious marks of atten- 
tion we have received from the moment we landed in this country. 
Our stay amongst you will always be a most happy memory. We 
beg to be allowed at this closing session to express our gratitude to 
the representatives from the United States on the Guatemala Group 
Committee for the breadth of vision, the good will^ and the loyalty 
with which they worked in the preparation of the suggestions we have 
just had the honor to submit to this distinguished assembly. 

Honduras (Dr. Cordova) : Mr. Chairman, gentlemen, I beg to 
submit the Group Committee Eeport prepared by the Honduras dele- 



260 PAN AMERICAN FINANCIAL CONFERENCE. 

gation with the assistance of the representatives from the United 
States on that committee. Honduras has faith in the success of 
this Conference and believes that in due time practical benefits will 
come from it. The Honduras delegation thanks most cordially the 
Secretary of the Treasury for the many courtesies it has received. 
Gentlemen, we do not wish to say " Good-by," because this word has 
an unhappy significance ; I would rather our parting be "Au revoir." 

Nicaragua (Mr. Sol Wexler — New Orleans) : Mr. Secretary and 
delegates to the Conference, I have the honor to have been requested 
by the Honorable Doctor Pedro Rafael Cuadra, chairman of the 
Nicaraguan Committee, to say a few words on the report which that 
committee has submitted, fortunately in time to have been printed, 
and of which copies are here available. In that report reference was 
made to the present stable political conditions existing in the Repub- 
lic of Nicaragua at this time, due to the very excellent and patriotic 
government of the President, Dr. Adolf o Diaz. It has been shown to 
us by the representatives of that country that the affairs of Nicaragua 
are at this time administered in such a manner as to inspire the con- 
fidence of the investing public throughout this country, and, in fact, 
every other country seeking investment in foreign lands. We have 
also referred in this report to the wonderful resources of the Repub- 
lic of Nicaragua; in fact, showing that it is a veritable El Dorado 
for the agriculturist, the miner, the merchant, the banker, and the 
lumberman; and we have said in this report that if the present 
established and peaceful conditions can be assured we believe that 
ample capital will be forthcoming for the development of these 
resources. In that connection full explanation has been made to 
us of the pending treaty between the United States and the Re- 
public of Nicaragua, and we have strongly recommended in this 
report the adoption of this treaty by both Houses of Congress at the 
very next session, as we believe that it will insure for all future time 
absolutely the present favorable state of Nicaragua and will do more 
to encourage capital in the development of that great country than 
any other one thing that can be done. 

I am going to refer briefly to the conditions of that treaty, as 
follows : 

The pending treaty between the United States and Nicaragua 
gives to the United States important naval bases — that is, Little and 
Great Corn Islands on the eastern coast of Nicaragua and Fonseca 
Bay on the western coast. This latter bay is the only available port 
or harbor between California and Panama on the Pacific coast. At 
least, it can be seen that these two bases furnish a means of defense 
to the eastern and western approaches to the Panama Canal. In 
addition, the United States obtains exclusive right to the only re- 



PROCEEDINGS. 261 

maining interoceanic canal route on the continent, and even though 
the necessity might not arise for another canal, nevertheless our in- 
vestment in Panama of $500,000,000 is safeguarded by acquiring this 
alternative route for $3,000,000. 

The psychological and moral influence created by these acquired 
rights will have a tremendous effect in affording all foreign investors 
alike the economic and political stability necessary for the develop- 
ment of the vast natural resources in Nicaragua. 

This treaty has been approved by both of our political parties. It 
creates no entangling alliance. It does not establish a dangerous 
precedent, because it is simply a purchase and sale of something that 
no other country has. 

It should not be considered as transgression on sovereignty, because 
it will pacify revolutionary tendencies and furnish a firm foundation 
for independence and democratic government, contrary to conditions 
under the old regimes which so often invited interference. 

Because of the geographical position of Nicaragua, in the very 
heart of Central America, whatever is done there will radiate its 
influence throughout the adjacent Republics, and we believe for these 
reasons, as well as for very many others which might be cited and 
which it is useless to refer to here, that these treaties should be 
adopted at the very next session of the United States Congress, and 
that all of us Americans who have any influence with our Represen- 
tatives should endeavor to explain, as far as lies within our power, 
the advantages which will accrue by the adoption of this treaty not 
only to Nicaragua but to the United States and to all of its com- 
mercial and financial interests as well. 

We have also referred in this report to the desirability of an 
amendment to the United States national banking laws, which shall 
provide that banks be permitted to subscribe, within a certain limited 
specified proportion of their capital, in the stock of banks located in 
foreign countries. At the present time banks with a capital of a 
million or more dollars may establish branches in foreign countries. 
This provision, therefore, naturally excludes all banks having less 
than a million dollars capital from participating in the benefits of 
a foreign branch, which is a wise provision of the law. But some 
of us are of the opinion that if the law could be so modified that a 
certain reasonable percentage of capital and surplus might be in- 
vested in foreign banks, that a number of banks located throughout 
this country might be willing to participate to a certain extent in 
the establishment of banks in foreign countries. By this means 
they would not run the great risk which might be incurred by the 
establishment of a branch bank and by entrusting to the manager 
thereof the entire resources of the parent bank. By this proposed 



262 PAN AMERICAN FINANCIAL CONFERENCE. 

amendment the risk would be so divided by the taking of an interest 
in various banks located at different points that I- believe it would 
appeal to the patriotism and business acumen of nearly all the bank- 
ers of this country. 

Having finished the outline of the report of Nicaragua, I desire, 
Mr. Chairman, to express to you my appreciation of the opportunity 
which your kind invitation has afforded me of participating in the 
Conference which has been held here during this week. I also wish 
to express the appreciation of the city of New Orleans, the second 
largest port in the Western Hemisphere, of the motives which have 
actuated you in calling this Conference, for we of New Orleans feel 
that whatever good may come of it — and we believe great good will 
result — the city of New Orleans will probably be the greatest benefi- 
ciary of all of the cities of the country. We believe that, because we 
are in the closest proximity to all of the Central American States and 
to all of the South American countries lying on the west coast. We 
are some five hundred or six hundred miles nearer to the canal than the 
city of New York ; we are several thousand miles nearer to Chile and 
Boliva and Peru than either San Francisco or New York ; and we have 
this additional advantage, that the city of New Orleans possesses pub- 
licly owned wharf, terminal, and warehouse facilities, which enable it 
to give cheaper docking and warehouse privileges than any other city 
in the country. In other words, a steamship or railroad line can 
come to New Orleans at any time and obtain identically the same 
privileges which any other railroad company, however long it may 
have been there, or any steamship line, however many years it may 
have touched at that port, can possibly receive. We are, however, 
Mr. Chairman, opposed to government-owned ships. We of New 
Orleans feel that it will be vastly more advantageous to the com- 
merce of the whole country if the establishment of a merchant 
marine could be done by private enterprise rather than by govern- 
ment ownership. We will not say we do not believe that perhaps 
some compromise between the two is feasible, but we feel, as we have 
had reason to feel, that the establishment and operation of lines of 
ships by the government will lead to the ever-recurring weakness of 
our form of government, namely, constant logrolling and efforts to 
have the ships leave f rom a particular port, and the port having the 
greatest influence in Congress naturally will get the ship line. We 
believe that government assistance is absolutely necessary to the 
establishment of a merchant marine. We do not believe that capital 
can be procured for it without government assistance, because cap- 
ital will not make the investment unless it is assured of a reasonable 
return. And while w.e realize that the question of subsidies is more 
repugnant to our political parties than to their individual members, 



PROCEEDINGS. 263 

yet, although frequently parties rather misunderstand and misinter- 
pret the views of the general public, they very often tend to mold 
those views. 

In my intercourse with peopie at large I find in their desire for the 
establishment of a merchant marine no very decided opposition to 
its being placed upon some basis by somebody, or to a subsidy that 
will enable it to be a paying enterprise, or at least enable it to be 
established ; and I believe it is along some such line that we shall be 
compelled to establish eventually our merchant marine. 

I thank you very much for the courtesies which we have received 
here, and for the opportunity of saying a word to you at this time. 
[Applause.] 

Secretary McAdoo. The Secretary of State desires to say a word 
to the audience. 

Secretary Bryan. Mr. Chairman and Gentlemen, I have asked 
the Secretary of the Treasury to allow me to say a word in regard to 
this treaty. I need not tell you that it is a matter in which the de- 
partment with which I have the honor to be connected has been 
deeply interested. And I desire to add just this word, which prob- 
ably could come more appropriately from this Government than 
from the committee. 

It has been suggested that this treaty with Nicaragua is in some 
way antagonistic to the interests of other Central American Re- 
publics. When we learned that there was uneasiness lest the treaty 
might interfere with the rights of adjoining countries, we gladly 
stated that we would amend this treaty so that it would specifically 
provide that none of its terms should in any way affect the rights 
of other countries of Central America. [Applause.] We did not 
regard this amendment as necessary, because nothing that Nicaragua 
and the United States could do by treaty could possibly affect the 
rights of any countries not parties to the treaty, but in order to 
contribute to a sense of security we have been very glad to offer this 
assurance, and we have done it with the approval of Nicaragua. You 
will find, when the treaty is ratified, that it will contain an amend- 
ment that will specifically declare that no other country is to be in 
any way injured by any of the rights therein conferred; and we 
have gone further and said to Costa Rica that we are perfectly 
willing to make a treaty with her, purchasing an option on her 
interest in the canal route, just as we are purchasing an option from 
Nicaragua. And we have also stated to Honduras and to Salvador 
that we shall be pleased to make with them arrangements for a lease 
of land for a naval base similar to that made with Nicaragua. The 
lease with Nicaragua gives us all the land we need for a naval base 



264 PAN AMERICAN FINANCIAL CONFERENCE. 

upon the shore adjacent to Nicaragua, but, in order to show our en- 
tire impartiality, we are perfectly willing to treat with all adjoining 
nations in exactly the same spirit and upon the same terms, and we 
want them all to understand that nothing that we do with any of 
them is at all prejudicial to their interests as they are related to each 
other ; that we shall be more than pleased to have them all confer and 
consult with each other about all matters that affect the welfare of 
Central America. [Long applause.] 

Panama (Dr. Arjona) : Mr. Chairman and gentlemen, the Panama 
committee, whose chairman I had the honor to be, agreed yesterday 
that Mr. Penfield should explain to you what had been done at our 
meetings. His absence imposes upon me the task of giving you an idea 
of our work. All questions relating to the trade and commerce, the 
fiscal and economic conditions of Panama — and they have been of 
great moment — were considered by the Group Conference Committee 
in a broad and high spirit of justice. The distinguished American 
representatives who shared our labors gave proof of lofty purposes, 
which we deeply appreciate. It only remains for me to present to the 
Secretary of the Treasury the sincere appreciation of my Government 
and of my people for having afforded us the opportunity to place 
our needs before the Government of the United States over which 
that great statesman Wilson presides, ably assisted by the distin- 
guished Secretary of State, Mr. Bryan. 

Paraguay (Mr. William Wallace White) : Mr. Secretary, the re- 
port of the Paraguayan committee has been placed in the hands of 
the Secretary-General, by whom it will doubtless be submitted to Mr. 
Moore, and the delegation will be glad to leave the matter in the 
hands of that able gentleman. 

Peru (Dr. Alzamora) : Mr. Secretary, I have the honor to submit 
a few remarks on the report of the Peruvian delegation, which was 
handed in this morning, together with others, by the different secre- 
taries of the group conference committees; and I understand that 
you now have before you a printed copy of that report, and I ask, 
in your discretion, that it be acted upon favorably. 

The only thing I have to add to that report and to the memoran- 
dum to which it refers is that the Peruvian committee has worked 
along the lines wisely suggested by the Secretary of the Treasury. 
During all of the time of this session the members of this committee 
have understood one another and have harmonized entirely with the 
views expressed by the Secretary of the Treasury. They have been 
guided by a sentiment of common friendliness, consideration, and 
sympathy. Here is the first practical result of this Conference. It is 
perhaps the most fundamental of all of the results to be expected. 
It has, I think, also been attained by the other committees. 



PROCEEDINGS. 265 

There are a great number of men in this Republic who have worked 
in connection with those from the other Republics, and we think all 
have been reciprocally benefited and that the sentiment has been 
one of harmony. Of course this feeling will extend here and abroad 
in the Republics of Central and South America, and it will afford 
a common link between these peoples, formerly so separated, which 
will shortly tend to make them more united. I think another im- 
pressive and profound result will arise from this common under- 
standing between the peoples of North, Central, and South America. 
It has often been said that the best bargain is that which gives equal 
benefit to the two contracting parties. It has been a rule so very 
often quoted that its force has been lost in the remoteness of time, 
so that never in any country or continent has its observance been 
possible. To-day a very notable thing occurs. A school of philoso- 
phers has proclaimed the responsibility of promoting, not only prac- 
tically but theoretically, this principle of ethics ; and this gathering 
here is laying the foundations for attaining it. If the beginning here 
made produces in the near future the result to be expected, a new 
ideal will arise by which the practical life of business will harmonize 
with the principles of justice and of sympathy and of love among 
men. [Applause.] 

CONTINUATION OF SUMMARY OF GROUP REPORTS. 

Mr. Moore. A summary of the Peruvian report shows that it rec- 
ommends the adoption of a uniform monetary standard for all 
American countries; the extension of local banking facilities; the 
establishment of a system of obtaining information as to the finan- 
cial and business standing of merchants in the various countries. It 
also emphasizes the importance of a system of arbitration of com- 
mercial disputes, and, finally, it presents the question of a merchant 
marine and improved transportation facilities as a subject which 
overshadows all others in importance. 

CONTINUATION OF REMARKS IN CONNECTION WITH GROUP 

REPORTS. 

Salvador (Dr. Quinonez) : Mr. Chairman and gentlemen, I have 
nothing to add to the subject of finances which we have had under 
consideration. Inasmuch, however, as certain matters have been 
treated here which very closely bear upon our commercial interests, 
I desire to manifest our acceptance in an indirect manner of the words 
pronounced by the President of the United States in his address of 
welcome, and a few moments ago by the Secretary of State, when he 
remarked that all the Latin-American Republics would receive an 
equal share of respect and consideration, no matter how small they 



266 PAN AMERICAN FINANCIAL CONFERENCE. 

were. May I be permitted to remind you that Salvador is, in point 
of territory, the smallest of these, but that she is ever appreciative 
of the honors and respect shown her by the big nations, such as the 
United States. I take this opportunity to express to the Government 
of the United States the respect and consideration in which it is held. 

Uruguay (Dr. Cosio) : Mr. Chairman and gentlemen, I desire to 
say a few words — for I do not wish to tire you — on three points 
touched on in the program of the Conference, in order to avoid what 
may appear to be a contradiction were no explanation made. Before 
leaving Uruguay the subjects we would take up were determined 
upon by the President of the Republic, for although we had not yet 
received the list of topics suggested for the Conference our delega- 
tion, nevertheless, presented certain memoranda. The Conference 
took the form of group committee meetings for each country and of 
two general committees, one on transportation and the other on uni- 
formity of laws. This circumstance has caused our committee, as 
well as others, to submit conclusions at the same time as the special 
committees presented their suggestions ; and in the case of Uruguay 
it has happened that these general committees have offered still 
further resolutions, with the approval of the Uruguay delegation. 
This is what I have referred to as an apparent paradox. In effect 
one of the general committees acted first in accordance with its own 
ideas, and later with the conclusions arrived at in the group com- 
mittees, but those resolutions were adopted in conformity with the 
views and tendencies of the Uruguay delegation. 

With regard to inter-American commercial relations the gov- 
ernment and people of Uruguay have decided to support the prin- 
ciple of customs privileges among the countries of this hemisphere. 
By this we mean that the products at present sent to foreign lands 
and totaling millions of dollars yearly, should find their way pref- 
erably to American markets on the basis of reciprocity. The resolu- 
tion adopted is general in character, and is an evidence of our desire 
to foster the idea of Pan Americanism with practical commercial 
results. Were it to be otherwise Pan Americanism would be merely 
idle talk. I wish to call attention to one of the important conclu- 
sions, namely, that responsibility be made the basis of the many 
commercial operations undertaken. I am going to beg the chairman 
to allow Mr. Rovensky to say a few words on the importance of 
these propositions, one of which — and I deem it of great value — was 
presented by the Uruguay committee, composed of the vice presi- 
dent of the National City Bank of New York, the first large Amer- 
ican bank to establish branches in South America, and of other no 
less distinguished men. 



PROCEEDINGS. 267 

Secretary McAdoo. Gentlemen, the time has arrived when we 
should adjourn in order to meet the President. Immediately upon 
reassembling this afternoon we will begin where we have left off and 
finish. I would suggest that we meet punctually at 3 o'clock. Here- 
tofore we have been allowing thirty minutes' leeway. We will now 
adjourn until 3 o'clock. 

When you arrive at the White House I beg that the foreign dele- 
gates will arrange themselves in alphabetical order so that they may 
be presented in that way to the President. The American conferees 
will kindly fall in immediately behind our foreign guests and be 
thus introduced to the President. 

(Accordingly, at 12.15 p. m., the Conference adjourned.) 



SEVENTH SESSION 



SATURDAY AFTERNOON, MAY 29, 1915 



269 



SEYENTH SESSION, SATURDAY AFTERNOON, MAY 29, 



The Conference reassembled at 3.10 p. m., and was called to order 
by the Honorable William G. McAdoo. 

MISCELLANEOUS BUSINESS. 

The Secretary-General, Dr. Powe. I desire again to call the atten- 
tion of the delegates of the countries represented at the Confer- 
ence to a request made several days ago in writing and repeated from 
the platform that the delegates from Central and South America 
select one of their number to speak at the banquet this evening. That 
is, to have one representative to speak for all of the delegates repre- 
sented at this Conference. 

Dr. Pearson. May I answer that the South and Central American 
delegates have chosen the best person possible to represent them, 
namely, Dr. Perez* Triana, who has accepted the honor and the 
pleasure. [Applause.] 

Secretary McAdoo. Upon adjournment this morning Uruguay had 
the floor, and I understood from the Uruguayan delegation that you 
wished Mr. Eldridge to make a few remarks upon a feature of your 
report which you had not touched upon. I will therefore ask Mr. 
Eldridge to speak for the Uruguayan delegation now. 

REMARKS IN CONNECTION WITH GROUP REPORTS. 

Mr. H. E. Eldridge (New York). Mr. Chairman and delegates to 
the Financial Conference, the Uruguayan delegation is, I think, as 
well prepared to handle the various subjects suggested by the Secre- 
tary of the Treasury in calling this meeting as any other delegation 
could have been. None of their suggestions was more interesting than 
those pertaining to credits. They had requested Mr. J. E. Povensky 
(New York), one of the representatives of the United States attached 
to their group committee, to explain their attitude. As Mr. Povensky 
left for New York at two o'clock they have asked me to make their 
statement in his stead. 

They realize that the merchants of the United States in the course 
of time could perhaps equip themselves for ascertaining the stand- 
ing of the various firms and houses with which they do business in 
South America as well as the merchants of any other country. But 

271 



272 PAN AMERICAN FINANCIAL CONFERENCE. 

they feel that since it is particularly desirable at this time that the 
best efforts should be made promptly to put the merchants of this 
country in such a position that they may more intelligently deal with 
the business houses of South America and Central America, it would 
be wise to urge upon the merchants of those countries the wisdom of 
making to the business world of North America, wherever requested, 
such statements of their financial condition as will permit business to 
be more speedily transacted. In turn, that the merchants and firms 
of Central and South America shall be furnished with similar state- 
ments of conditions by United States merchants whenever requested. 
They respectfully urge that this basis for a quicker interchange of 
financial credit information be adopted by all the countries. 

I wish also to remark that the representatives of the United States 
are particularly pleased with the invitation extended by the delegates 
from Uruguay that members from the United States be requested to 
visit, as their guests, the various countries of Central and South 
America within the next six months. I can not emphasize too much 
the value of such a visit on the part of our business men. There is 
nothing that brings about a firmer or better basis between the mer- 
chants of one section with those of another than a close and intimate 
personal acquaintance. Day by day and year by jear the merchants 
and business men of this country are realizing in greater degree than 
ever before how great a part personality plays in business. We 
must learn to adapt ourselves to the methods and ways of doing 
business which those with whom we seek to deal have long adopted 
as their standard, and they in turn must bear with us until we can 
reach that happy medium where we all understand one another bet- 
ter than we have ever done before. I believe that this Conference 
has accomplished much to bring about that desired result, and I 
am sure that the foreign delegates who have honored us with their 
presence will go back to their homes with a much better feeling, 
a much better disposition toward the people of the United States 
than they have ever had before. I am well satisfied, too — in 
fact I know — that the representatives from the United States have 
words of praise only, not merely on account of the personality of 
the gentlemen who have honored us with their presence, but because 
of the high standards of business life and social life they represent. 
I thank you. [Applause.] 

The Secretary-General, Dr. Rowe. We did not conclude this morn- 
ing the calling of the roll of Republics represented. The next in 
order is Venezuela. 

Venezuela (Dr. Rincones) : Mr. Chairman and gentlemen of the 
Conference, I have the honor to present to you the report of 
Venezuela. I do not come here to add anything to what has already 



PKOCEEDINGS. 273 

been said by the speakers who have so ably discussed the subjects 
and the program of this Conference which has brought us together 
under the roof of the Pan American Building. I came here merely 
to express once more my gratitude, not only for the friendly and 
very cordial reception tendered us by the high officials of the Gov- 
ernment of this great Kepublic, but also for the social courtesies 
extended to us by the people of this beautiful capital, which bears 
with honor the name of the Father of his Country. [Applause.] 

I wish further to express an ardent hope that the efforts of this 
great nation on behalf of closer relations with the other independent 
States of the New World may attain a real success and bring about 
closer fraternal ties between all the countries of this hemisphere 
under the auspices of liberty, equality, and fraternity. When this 
end has been attained posterity will say, " The United States of 
America made possible the United American States — united in the 
bonds of friendship and common ideals." [Applause.] 

GROUP REPORTS SUMMARIZED. 

Argentina (Dr. Aldao) : Mr. Chairman and gentlemen of the Con- 
ference, I have to summarize the work of the Argentine Group Com- 
mittee, and while it probably would have been wiser to use my own 
language, I shall nevertheless try to avoid imposing upon your 
patience and kindness. 

In the first place, allow me to express my appreciation to the 
representatives of the United States who have been kind enough to 
participate and cooperate so efficiently in the labors of the Argen- 
tine committee. I have here its report, and I will try to summarize 
the conclusions to which we have come. 

The discussion centered upon the following general headings: 
First, transportation. As the chief object of maritime transportation 
will perhaps not be realized in the very near future, being in the 
meanwhile only a cherished hope, the Argentine Group Committee, 
secondly, deems it advantageous to secure, if possible, cheaper cable 
communication between the United States and the Argentine Ee- 
public. The present rates are, in our opinion, rather high, from the 
fact that there does not exist one single direct cable between the 
United States and Argentina. It is necessary to transmit our mes- 
sages to Argentina over more than one line, which means more than 
one profit. For this reason the Group Committee has suggested that 
your government and perhaps those of other countries interested 
cooperate, in order to get as soon as possible cheaper communication 
of this kind. 

The third point treated refers to banking facilities, or, rather, to 
increased banking facilities. As the report, in my opinion, is ex- 
98257°— 15 18 



274 PAN AMERICAN FINANCIAL CONFERENCE. 

tremely complete upon that subject, I think that a quotation from it 
will save your time. I therefore quote as follows : 

Resolved, That this committee favors the establishing of such banking 
facilities between the United States and the Argentine Republic as will affect 
a more intimate and reciprocal relation than now exists, based upon mutual 
cooperation and profit. 

A matter especially treated by our committee refers to trading 
facilities. We have considered in the first instance that it is useless 
to make an effort in regard to transportation, since the import trade 
in Argentina is not in the hands of the Argentine people. The 
Argentines devote their activity, energy, and capacity mainly to 
the cattle industry and to agriculture, and the importation of goods 
is in the hands of foreigners, especially those of English, German, 
French, Italian, or Spanish nationality. Therefore it is quite natural 
that the foreign establishments in Argentina generally prefer to treat 
with their native countries. This is the principal reason why the 
interchange between the United States and Argentina has not 
reached the high degree it really deserves; although the United 
States produces the same things, using the best materials, manufac- 
tured in the best manner, and has all the conditions necessary to 
compete successfully with the European manufacturers. To get 
the same result it will be necessary for Americans to follow this 
method. The United States should establish expositions, show- 
rooms, and boards of sale where American goods can be exhibited, 
and in this I share the opinion of my colleagues. We have talked 
at length on this point, and have agreed that as soon as American 
manufactured goods are known there will be an active demand for 
them in the Argentine market. 

Finally the Group Committee gave much though to a point con- 
sidered essential. This is the question of litigation that may arise 
between citizens or residents of the United States and of the Argen- 
tine. The ordinary recourse is to appeal to the courts, to submit to 
expensive, long drawn-out proceedings and delays, necessitating the 
employment of lawyers. We believe that international trade in 
order to be increased requires that all those difficulties be avoided, 
the expense saved, and no lawyers employed. I say this, although I 
am a lawyer. [Laughter.] To attain a result so interesting there is 
only one means. That point has been thoroughly considered, and 
our committee — taking advantage of the fact that the committee of 
the United States Chamber of Commerce was meeting at Washing- 
ton — decided to approach that important body on the subject, and 
Mr. Vanderlip, of our committee, was delegated to confer with the 
Chamber of Commerce of the United States. We are extremely 
pleased to inform you that the Chamber of Commerce has decided to 
assist us in every way possible in the effort to secure that very im- 



PROCEEDINGS. 275 

portant end. Arbitration, we conceive, is the only method that 
will solve disputes arising between merchants of different countries. 
Of course, such an idea can not be set on foot and results attained 
immediately, but we are going ahead with the matter, and we wish 
to inform you that next Saturday a committee formed by Mr. Fahey, 
president of the United States Chamber of Commerce, Mr. Vanderlip, 
and I are to meet in New York in order to try to perfect a plan which 
will be submitted to the boards of trade in both countries, and we hope 
that out of it a definite project may be devised to enable the merchants 
in the United States and in Argentina to solve any differences they may 
have. [Applause.] We hope it will be the first proof of the benefit 
to arise from this splendid Conference, due to your efficient guidance, 
Mr. Secretary. 

I think, in the main, this is the result of the work of the Argentine 
committee. In conclusion, I wish again to thank you for having 
given us this opportunity of meeting and of knowing and becoming 
known to you. [Prolonged applause.] 

Secretary McAdoo. The Honorable John Bassett Moore will now 
finish summarizing the reports not covered by him this morning. 

. Mr. Moore. Mr. Chairman, I will first take up the report of 
Ecuador, which has come in since the morning. It refers to the sub- 
ject of public finance, the monetary situation in that country, the pres- 
ent banking situation, and the subject of financing public and private 
improvements. It also treats of the extension of inter- American 
markets, of the improvement of merchant marine and transportation 
facilities, and of better regulations for commercial travelers and their 
samples. 

I referred this morning to the previous very full memorandum 
presented by the Ecuadorian delegation to the Secretary of the Treas- 
ury at the opening of the Conference. 

The next report which I have to summarize is that of Honduras, 
which deals first with the public revenues and expenditures as 
affected by the war in Europe, the measures or remedies to meet 
the situation, and the possibilities of international cooperation. 
It deals also with the monetary and banking situation, and recom- 
mends the establishment of branch banks and direct exchange. It 
also treats of the financing of public improvements — first, by national 
loans, and, secondly, by provincial or State loans; likewise, the 
financing of private enterprises, including railways, tramways, and 
electric-lighting companies. It recommends an improvement in the 
laws relating to trade-marks and the classification of merchandise, 
and urges the extension of inter- American markets by more liberal 
credits, acceptances, and discounts, and the employment of the dollar 



276 PAN AMERICAN FINANCIAL CONFERENCE. 

exchange. It strongly recommends the improvement of transporta- 
tion facilities, of the postal service, and of the parcels post. Hondu- 
ras, it is stated, will — in the manner indicated in its report — stand 
ready to grant subventions to steamship lines. It indorses the Argen- 
tine proposition as to the arbitration of commercial disputes. 

The next report, which has just come into my hands, is that of 
Paraguay. It, too, deals with the internal monetary situation, recom- 
mends the improvement of banking facilities, points out the need 
of foreign capital for the development of Paraguayan resources, 
showing the existence there of a profitable field for investment of 
capital from the United States. It strongly urges the establishment 
of a system of obtaining information as to the financial and business 
standing of merchants of the countries concerned and also indorses 
the proposal for the establishment of a system of arbitration for 
commercial disputes. 

REMARKS IN CONNECTION WITH GROUP REPORTS. 

Dr. Velazquez (Paraguay) . Mr. Secretary, ladies, and gentlemen, 
we find nothing to add to nor to qualify in the able summary made 
by Mr. Moore, unless it be to emphasize the point that Paraguay will 
see with much satisfaction the establishment there of a branch of a 
North American bank, and gives renewed assurance to the investors 
of this country that their capital will find there sound investment and 
large and certain returns. 

The delegation of Paraguay avails itself of the opportunity afforded 
by this last general session of the Financial Conference to express 
the sincere pleasure it has derived from its participation, modest 
though it has been, in the great work for which the Conference has 
been convened. 

If the magnitude of the task, even when undertaken competently 
and with tenacity, is beyond what human endeavor could fully ac- 
complish in the short term dedicated to this labor, it is not to be 
doubted that the final result will be both extensive and beneficent. 

A mere glance over the field covered makes it clear that the subjects 
discussed and the ideas advanced lie at the foundation of that monu- 
ment which the American Continent is endeavoring to build for the 
prosperity and welfare of all. 

We can not conclude without expressing our special appreciation 
of the happy inspiration of the honorable Secretary of the Treasury 
in placing in friendly and intimate contact the North American 
experts and the delegates from the other Republics, an act which 
will without any doubt continue to yield fruit in every country con- 
cerned, through the perfect knowledge obtained of conditions in 
financial and economic matters. 



PROCEEDINGS. 277 

Our last words could not be other than to express our cordial 
thanks for all the consideration and good will found among the 
members of this Conference and for the unbounded courtesy and 
hospitality extended to us by the Government and the people of the 
United States, for whose continued prosperity and everlasting 
greatness we formulate our most sincere wishes. [Applause.] 

GROUP REPORTS SUMMARIZED. 

Mr. Moore. The next report is that of Peru, which recommends 
the establishment of branches of American banks in that country 
and advises that steps be taken by the United States financial in- 
stitutions to facilitate the placing of loans in South America. It 
urges uniform customs regulations; the adoption of methods in 
the United States to place the resources of the country at the 
disposal of foreign commerce; the establishment of bonded ware- 
houses and the issuance of receipts or warrants which will be ac- 
cepted by banks as security for loans ; the establishment of exchange 
on the dollar basis; and the appointment of an international com- 
mission to deal with the various questions mentioned. It also treats 
of the need of improved transportation facilities, and again indorses 
the proposal for the arbitration of commercial disputes. It finally 
recommends that the countries which have not as yet done so adopt 
pure food and drug laws. 

In connection with this recommendation the report asks special 
attention to an accompanying memorandum signed by Mr. Eduardo 
Higginson, the Peruvian delegate, and approved by Dr. Isaac 
Alzamora, chairman, in which information is given regarding the 
present situation in Peru, the desirability of investments there. 

It touches upon the possibility that when the present conflict in 
Europe is over it may be necessary to exercise vigilance and to be 
energetic here unless trade should tend to revert to former channels. 
No doubt the American merchants will be alive to that. This memo- 
randum recommends the establishment of American banks in Peru, 
also of branches of American manufactories and the formation of 
agricultural, land, and real estate banks, the want of which is greatly 
felt in Peru. It refers to the importance of improving domestic as 
well as foreign transportation, of the establishment of direct pas- 
senger service under the American flag to Callao arranged so as to 
avoid quarantine difficulties. It also urges the reduction of cable 
rates and points out the need of high-power wireless stations in Peru. 

In conclusion, it states that perhaps the measure of greatest neces- 
sity is that which deals with the condition of foodstuffs coming into 
Peru. The laws of the United States governing this matter are very 
strict, and properly so, and therefore it recommends that the benefit 



278 PAN AMERICAN FINANCIAL CONFERENCE. 

of the pure food and drug laws be extended to importation and 
exportation in all Pan American countries. 

The last report which I have to summarize is that of Venezuela. 
It deals with the subjects of merchant marine and ocean trans- 
portation, and of improved postal facilities; and a summary is 
given of Venezuelan trade. It urges the extension of inter- American 
markets by the establishment of more liberal credits. It indorses the 
project for the arbitration of commercial disputes. It advises that 
our newspapers and periodicals should more rigidly examine mate- 
rial that comes to them, particularly that which contains an element 
of liveliness, based upon supposed troubles that do not actually exist. 
[Applause.] It treats of the desirability of the development of 
public utilities, railroads, and public improvements. Much infor- 
mation is given as to the monetary system of Venezuela and to the 
present state of the public debt. 

Secretary McAdoo. Gentlemen, that concludes the group reports, 
and I would like to ask the delegates if they will be good enough to 
supply copies of these reports in Spanish, because it will facilitate 
the work of publication. 

I would now like to call for the report of the General Committee on 
Transportation and Communication. Who will make that report ? 

COMMITTEE ON TRANSPORTATION REPORT. 

Dr. Pearson (Argentina). Mr. Secretary and gentlemen, having 
been honored with the chairmanship of this very important com- 
mittee, I will only say a very few words, as I have handed in the 
report signed by twenty of the twenty-two members who composed 
the committee. Unfortunately the other two could not sign it, as 
they had to go to New York yesterday before it was ready. 

It has been the unanimous opinion of all of us — North Americans 
and South Americans — that there is absolute necessity, in the inter- 
ests of commerce and for a better knowledge of each other, that some 
method be arrived at for the establishment of fast steamship com- 
munication between North and South America. At our first meeting 
we thought it might be convenient for the South American Kepublics 
present at this meeting to constitute themselves into a commission 
so as to have more liberty to formulate their opinions. This com- 
mittee was subdivided because of the east and west coasts. The full 
committee met and presented a very brief report, recommending that 
the president of this Conference should appoint a permanent com- 
mission to bring about the best means of attaining the desired end. 

It is useless to go on, because everybody knows that we want fast 
steamers, and fast steamers are the basis and the foundation of bank- 



PROCEEDINGS. 279 

ing, trading, and all sorts of commercial relations. [Applause.] 
It is useless — I mean, it is a little premature — for us to try to estab- 
lish commercial relations, if we find we can not get there. The first 
thing is to get there, and then business will follow. 

Mr. Chairman, I do not wish to leave this platform before saying 
one word to thank you very specially for having invited us in this 
friendly and informal fashion, because we have met here as if we 
were all sons of one house, belonging to the same group ; and I am 
sure it would be a great pleasure to all of us Latin Americans if in 
a very short time we could have a visit from you, Mr. Secretary 
[applause] , in order that you could see with your own eyes what our 
countries are worth, and then have a good opportunity of formu- 
lating some project which would be of mutual interest and advantage 
to all. [Applause.] 

Secretary McAdoo. I will now ask the Secretary- General if he will 
read the Report on Transportation. 

The Secretary-General, Dr. Rowe : 

REPORT OF THE GENERAL COMMITTEE ON TRANSPORTATION AND 

COMMUNICATION. 

Your committee on transportation and communication resolved 
that a subcommittee to be composed of one member from each of the 
South American countries represented on the general committee, 
confer and report back any plan or plans for the inauguration of 
more regular, rapid, frequent, and up-to-date communication be- 
tween these countries and the United States which seemed to them 
practical of accomplishment. 

This subcommittee composed of Messrs. Aldao, Cavalcanti, Gon- 
zales, Alzamora, Cosio, and Vergara, submitted two reports, one 
signed by Messrs, Aldao, of Argentina; Cavalcanti, of Brazil* and 
Cosio, of Uruguay ; and the other by Mr. Vergara, of Chile. 

These two reports are designated respectively as "A" and " B." 

Report "A," submitted to the general committee on transportation 
and communication by Messrs. Aldao, Cavalcanti, and Cosio: 

The Pan American Financial Conference begs to suggest the advisability of 
calling for bids not later than December 31, 1915, for the establishment of a 
regular line of fast mail steamers between United States ports and Rio de 
Janeiro, Montevideo, and Buenos Aires, under the following conditions: 

Steamers to have at least 10,000 tons displacement ; to make at least two trips 
per month, with accommodations for at least 150 firbt-class cabin passengers; 
with refrigerating arrangements ; and to complete the trip between United States 
ports decided upon and Buenos Aires, pier to pier, in not more than 15 days. 

Bidders to state the compensation demanded, and the period of the contract. 

As part of the compensation for services rendered, said vessels to be exempt 
for five years from all fiscal charges in the respective countries and to enjoy 
all facilities granted to any other vessels. 



280 PAN" AMERICAN FINANCIAL CONFERENCE. 

Bids to be acted upon within three months and preference to be given, all 
other conditions being similar, to whoever will provide for earlier inauguration 
of the service. 

The Governments of the respective countries to agree upon the proportionate 
charges to be paid by each and upon all other details. 

(Signed) Axdao. 

Cavalcanti. 
Cosio. 

Report " B," submitted to the general committee on transportation 
and communication by Mr. Vergara, of Chile : 

In the conference of to-day of the subcommittee the Minister of Finance of 
Uruguay, Dr. Cosio ; the delegate of Argentina, Dr. Aldao ; and the undersigned 
delegate of Chile formulated three separate projects for the establishment of 
fast maritime transportation between the interested countries. 

In view of this fact and of the circumstance that the delegates of Colombia, 
Venezuela, Panama, and the Republics of Central America had expressed in the 
general meeting of the conference that their respective countries for the present 
have no interest in the proposed question it was agreed : 

(a) That there should be only two lines of fast steamers; one to serve the 
ports of Brazil, Uruguay, and the Argentine Republic, and the other to serve 
Ecuador, Peru, and Chile. 

(&) That the conditions affecting said lines are different. 

(c) That the delegates from countries on the east coast of South America 
and the delegate from Chile should present their views on the question sepa- 
rately. 

The delegate of Peru, Dr. Alzamora, stated that, notwithstanding he concurs 
in the proposition of the delegate of Chile, he is unable to sign this report, be- 
cause he has no instructions from his Government, having been accredited to 
the conference by cable. 

The delegate of Ecuador, Dr. Gonzales, approves the general idea of the 
Chilean delegate, but he can not sign the report, lacking the necessary authoriza- 
tion from his Government. 

The delegate of Chile is of opinion that the conference may, nevertheless, 
recommend to the interested Governments that the need for a fast maritime 
transportation service between the ports of South and North America may be 
supplied as follows: 

(1) By the organization of a large company, subscription to the capital of 
which may be made by the public, the balance of the stock, if any, to be taken 
by the Government of the United States and the Governments of those Latin- 
American Republics interested in a proportion to be agreed upon. 

(2) The company to be incorporated under the New York laws, but the 
steamers to be registered in the different countries in proportion to the capital 
subscribed, and shall fly the flag of said country. 

(3) For the purposes of customs laws the steamers to be considered as of 
the nationality of the port, except the coastwise trade, in those countries where 
that trade is reserved for nationals. 

(4) The vessels to fulfill certain conditions, e. g., minimum tonnage of 5,000 
tons; minimum speed of 16 miles per hour. 

(5) The board of directors shall be composed of representatives appointed by 
the respective countries in proportion to the capital subscribed. 

(6) The payment of the capital subscribed may be made in cash or by trans- 
fer of vessels belonging to the Government subscribing provided said vessels 
are suitable. 

(Signed) Yergara. 

The transportation committee recognizes the paramount importance, 
of the transportation question and believes that the establishment of 
improved regular facilities is an imperative necessity to the expansion 
of the commercial and financial relations between the United States 
and the Eepublics of South and Central America. 



PROCEEDINGS. 281 

The committee further realizes the complexity of the problems 
which the subject involves and recommends as an aid to their solution 
the reports of the subcommittees representing the east and west 
coasts of South America, with its approval of the general suggestions 
contained in such reports. 

It earnestly recommends the serious consideration of such sugges- 
tions as practical propositions tending toward a prompt solution of 
the problems presented. 

In order to insure continuous action and to avoid delays it recom- 
mends the appointment by the chairman of the Pan American Finan- 
cial Conference of a permanent committee, to be composed of repre- 
sentatives from the United States and from Argentina, Brazil, 
Uruguay, Chile, Ecuador, and Peru. It should be the duty of this 
committee to obtain and furnish information pertinent to the subject 
and to take such other steps as in its discretion may, seem fit or 
necessary to* put into effect the plans outlined in the reports of the 
subcommittees above alluded to and further to consider and report 
to the chairman of the Pan American Financial Conference any other 
feasible, effective plan for the establishment of the desired expansion 
of shipping facilities. 

In conclusion, it is the unanimous conviction of the committee that 
such plans should be adopted as will most speedily establish direct, 
effective, and permanent transportation facilities between the United 
States and the Eepublics of South and Central America. 

Secretary McAdoo. The Honorable David E. Francis would like to 
say a few words on this subject. 

Gov. David E. Francis (St. Louis) : 

Mr. Chairman and Delegates or the Pan American Financial 
Conference. On behalf of the Transportation and Communication 
Committee, of which I was acting chairman in the absence of Mr. 
Hale Pearson, I desire to call your attention to two features of that 
report and to its conclusion. 

You will observe that the committee at its first session assigned to 
the foreign members the subject of ocean transportation. There 
were representatives on the committee from six South American 
countries only, the countries of Central America stating they had 
transportation facilities which, for the present, are adequate. You 
learned from the report that the delegates from South America were 
divided as to what policy should be adopted toward the establish- 
ment of ocean communication. Those of the Atlantic coast pro- 
posed that bids be received until the 31st of December from parties 
desiring to operate steamers between Montevideo, Buenos Aires, Eio, 
and New York; in other words, that plan was virtually a subsidy 
plan, whereas the countries of the Pacific coast recommended that 



282 PAN AMERICAN FINANCIAL CONFERENCE. 

this communication be established by the purchase and operation of 
vessels by the countries themselves and by private enterprise, stating 
in no indefinite terms that the conditions on the east coast differed 
from those on the west coast. But in the conclusion there was no 
real difference of opinion among any of the committee. 

This, gentlemen, in my opinion, is about the most remarkable Con- 
ference I have ever attended. For more than thirty years I have been 
attending conventions and congresses and national gatherings in the 
United States, and I have never seen one which was composed of men 
more representative not only in their foreign countries but in this 
country as well. Nor have I participated in the deliberation of 
any assemblage where the members devoted themselves more assid- 
uously, more intelligently, and more effectively to the business of 
the meeting than has been the case in this Conference, which has been 
in session for a week. Men of affairs from the United States have 
come here and for an entire week have given their best 'thought and 
all of their time to the objects of the Conference. 

What a contrast is there between conditions prevailing on the 
Western Hemisphere and those prevailing on the Eastern Hemi- 
sphere ! You need only to have your attention called to the state of 
affairs here to arouse within your breast a sentiment of admiration. 
Here all of the countries of Central and South America are asking 
that closer relations be established between the Republics of the New 
World. Their delegates are here, representative men in their respec- 
tive countries. They have made suggestions which I am sure will be 
prolific of much good, and no group committee report has neglected 
to set forth the necessity for better transportation facilities. Are we 
in this country going to deny to our brethren from Central and South 
America what they are asking on this occasion ? If not our duty, it 
certainly is to our interest to make a v§ry prompt and effective 
response to such expressions. [Applause.] 

There is a tide in the affairs of nations, as well as in the affairs of 
men, which should be taken at the flood. I am not here to oppose 
subsidies, nor have I come to this platform to advocate government 
ownership, but I am here to raise my voice — and in so doing I think 
that I reflect the sentiment of the best thought and the higher patriot- 
ism of this country — to obtain a decided and emphatic and prompt 
expression from this international gathering that the speediest pos- 
sible plan be adopted in order to establish quick, direct, regular, and 
permanent transportation facilities between the Republics of the 
Western Hemisphere. [Applause.] 

If my house were on fire I should not ask the source of the water 
used to extinguish the flames. If a member of my family were ill 
and I could not get my family physician, I would not hesitate to call 
in the services of some other doctor. It strikes me that almost simi- 



PROCEEDINGS. 283 

lar conditions prevail in this country to-day. We have an oppor- 
tunity now to establish closer commercial relations with the Repub- 
lics of Central and South America, and it is our duty to take ad- 
vantage of this opportunity. [Applause.] It may not return to us 
again in a generation or a century. 

I, therefore, Mr. Chairman, desire to offer this resolution, which 
expresses what is set forth in the conclusion of the report of the Com- 
mittee on Transportation, and I would like to get from this Confer- 
ence its expression upon the subject. The resolution reads as fol- 
lows : 

THE FRANCIS RESOLUTION ON TRANSPORTATION. 

Resolved, That it is the sense of this Conference that improved ocean trans- 
portation facilities between the countries composing the Pan American Union 
has become a vital and imperative necessity and that every effort should be 
made to secure at the earliest possible moment such improved means of ocean 
transportation, since it is of primary importance to the extension of trade and 
commerce and improved financial relations between the American republics. 

[Applause.] 

Mr. Le Gendre (New York). I presume it would not be in order 
to offer an amendment? 

Secretary McAdoo. What is it that you desire ? 

Mr. Le Gendre. I was going to suggest : " and that the laws of the 
United States be so changed that this may be brought into effect." 

Secretary McAdoo. Let me say that I appreciate more highly than 
I can express the exhibition of confidence which this committee mani- 
fests in the chairman of this meeting when it proposes that he ap- 
point an international committee for the purpose of considering this 
question. I do not believe, however, that such a thing is practicable. 
I should be very happy to do it if I thought it would produce re- 
sults ; but I think it is manifestly impossible that a committee of that 
character, designated by the Secretary of the Treasury of the United 
States, could deal with this problem; for it seems to me that each 
country has got to handle this matter in its own way. 

Now, as I said before, this is not a convention for the purpose of 
determining national policies. It is a Conference for the purpose of 
exchanging views, laying upon the table all facts and information 
obtained, together with expressions of opinion from the various coun- 
tries represented here as to what things are needed, with suggested 
possible remedies. These are to be sifted by you, and we are going 
to try to extract from this crucible into which we put all of these sug- 
gestions, some refined thing which we hope will work to the advantage 
of our respective countries. 

I would, therefore, suggest that we confine our expression to the 
resolution which Governor Francis has offered. I do not think that 
we are here to discuss government ownership or subsidies or any other 



284 PAN AMERICAN FINANCIAL CONFERENCE. 

such matter. That has become rather a political controversy in this 
country, and this is not the place to thresh it out. I would suggest, 
therefore, that the Conference proceed to express itself upon Gov- 
ernor Francis's resolution, so if there is no objection I shall put the 
question on that resolution. 

Dr. Pearson (Argentina). I take great pleasure in seconding it. 

Secretary McAdoo. I do not think we shall hurt anybody's feelings, 
whether he be a government ownership man or not. 

(The Francis resolution was unanimously adopted.) 

Secretary McAdoo. Now, Mr. Moore, if you will be good enough to 
make the report of the Committee on Uniformity of Laws and Inter- 
national Commercial Court, we shall be glad to hear it. 

UNIFORMITY OF LAWS COMMITTEE REPORT. 

Mr. Moore. Mr. Chairman and delegates, in strict regularitjr this 
report should be presented by Governor Hamlin, of the Federal Ee- 
serve Board, who acted as chairman of the committee in the absence 
of the Secretary of Commerce ; but, Governor Hamlin being uncertain 
as to when his public duties might call him away, he requested me 
to undertake his task. This explains why I am standing before you 
again. 

In our report we have endeavored to confine ourselves to topics 
that seemed to us all to be of immediate importance. Many pro- 
posals were submitted to the committee. We considered, perhaps, 
from forty to fifty suggestions or topics altogether ; but we culled out 
a certain number in regard to which there was no difference of 
opinion whatever as to their urgency. 

The report of the committee consists of two parts — first, that in 
which the subjects to be dealt with are enumerated, and, second, 
that which proposes an organization for the purpose of carrying out 
the resolutions of the Conference. I may say that this list of topics 
is not intended to be final and exclusive. If it should be desired 
hereafter to take up other matters, the organization presented to 
the Conference will be able to consider them at any moment. 

The report is comparatively brief. 

I. SUBJECTS. 

The committee has not taken into consideration the subject of 
transportation, which should, in its opinion, be kept separate and 
distinct and be dealt with independently. 

The subjects which should, in the opinion of the committee, be 
dealt with in the report of the committee to the Conference are: 

1. The establishment of a gold standard of value. 

2. Bills of exchange, commercial paper, and bills of lading. 



PROCEEDINGS. 285 

In this relation we have drawn attention to the two European 
conferences that have been held on this subject. Two volumes 
printed by the Government of the United States may be obtained 
here, containing the reports of those" conferences. 

3. Uniform (a) classification of merchandise, (&) customs regulations, (c) 
consular certificates and invoices, (d) port charges. 

In this relation we have ventured to call attention to the report 
adopted by the Fourth International American Conference, at Buenos 
Aires, in 1910. 

4. Uniform regulations for commercial travelers. 

Consider in this relation the question of a certificate to be issued by the 
proper department of the government of the country from which the traveler 
comes that the bearer is a bona fide commercial traveler, this certificate to be 
properly viseed. 

This is, I believe, generally conceded to be a question of practical 
importance. We have received several letters from merchants advis- 
ing the adoption of some means by which the commercial traveler, 
being properly certified, may have free course with his samples. This 
would greatly aid in the promotion of trade. 

5. To what extent further legislation may be necessary concerning trade- 
marks, patents, and copyrights. 

Here we venture to call attention to the conventions adopted by 
the Fourth International American Conference. 

6. The establishment of a uniform low rate of postage and of changing 
money orders and parcel post between the American countries. 

7. The extension of the process of arbitration for the adjustment of "commer- 
cial disputes. 1 

II. OEGANIZATION. 

I come now to organization, and the committee makes the follow- 
ing recommendations: 

1. That for the purpose of carrying into effect the resolutions of the Confer- 
ence, and particularly for bringing about uniformity of laws on the subjects 
embraced in those resolutions, there be established an international high com- 
mission, to be composed of not more than nine members, resident in each coun- 
try, to be appointed by the minister of finance of such country. The aggregate 
members thus appointed shall constitute the commission. 

2. That for the purpose of aiding the international high commission and 
coordinating its work there be created in the Pan American Union a bureau, 
whose chief shall receive a salary of not less than $5,000 gold per annum ; and 
it is recommended that, in view of his initiative in bringing about the Con- 
ference, the governing board of the Pan American Union invite the Hon. Wil- 
liam G. McAdoo, Secretary of the Treasury of the United States, to suggest 
the name of the first chief of this bureau. 

[Applause.] 

iThis clause, not originally appearing in the subcommittee's report, was, at the last 
meeting of the general committee, upon motion of the Hon. John Bassett Moore, unani- 
mously adopted and incorporated into the complete report. 



286 PAN" AMERICAN FINANCIAL CONFERENCE. 

Expenses of the bureau, including the salaries of the chief and his assist- 
ants, to be paid by the Pan American Union, in whose budget a corresponding 
provision shall be included. 

3. The American Governments sha-ll instruct their diplomatic and consular 
officers and their commercial attaches to cooperate with the international high 
commission and with the bureau. 

The bureau shall be authorized to obtain in each country such expert assist- 
ance as may be necessary to the prosecution of its work, the expenses thus 
incurred to be treaed as a part of the expenses of the bureau. 

4. The bureau shall make to the governing board of the Pan American 
Union, for distribution among the governments concerned, and to the inter- 
national high commission an annual report. 

The bureau shall make to the next International American Conference a full 
report of its proceedings up to that time, with recommendations as to future 
work. 

This report is signed by all of the members of the general com- 
mittee. When the Conference shall have acted upon it, I will ven- 
ture to present some supplementary resolutions, the design of which 
is to push the work of this Conference immediately forward without 
any delay whatever. [Applause.] 

Secretary McAdoo. Mr. John H. Fahey, president of the United 
States Chamber of Commerce, will now say a few words. 

GENERAL RESOLUTIONS. 

Mr. Fahey (Washington). Mr. Chairman and gentlemen of the 
Conference, I ask the privilege of recognition on the part of the 
chair to present certain resolutions on behalf of the members of 
this Conference residents of the United States : 

Resolved, That we, the members of this Conference residents of the United 
States, desire to express to the President of the United States and to his Cabi- 
net our thanks for the generous hospitality and many courtesies which have 
been extended to us in connection with this most successful meeting ; 

Resolved, That we wish particularly to record our appreciation of our debt 
to the Secretary of the Treasury, whose wise statesmanship inspired this 
epoch-making gathering, not only for his efforts in bringing us together but for 
his many personal courtesies and his happy direction of our deliberations ; 

[Applause.] 

Resolved, That to the Federal Reserve Board, the Assistant Secretary of 
the Treasury, the Secretary-General of this Conference, the Director General of 
the Pan American Union, the press of the Americas, and to the other officials 
of the United States Government, and the citizens of Washington who have 
so thoughtfully and effectively contributed to our comfort and entertainment 
and to the success of this Conference, we would also express our earnest thanks 
and appreciation ; 

[Applause.] 

Resolved, That we spread on the records of this meeting formal expression 
of our appreciation of the high character and constructive ability of the mem- 
bers of this Conference from our sister Republics who have honored us by this 



PROCEEDINGS. 287 

visit, and whose heartiness, energy, and efficiency have contributed in such 
large measure to the splendid achievements of this gathering. The memory of 
this event and the opportunity it has afforded us for the establishment of closer 
personal relations and real friendship with these gentlemen will long remain 
with us, and we pledge ourselves to do all in our power to continue to promote 
this helpful intercourse. 

[Prolonged applause.] 

Gentlemen, since in their modesty it may embarrass our chair- 
man or our Secretary- General to present this motion, I beg to take 
that responsibility, and I move the adoption of this resolution. 

(The motion was seconded and unanimously carried.) 

And, Mr. Chairman, I should like also to take the opportunity to 
say, as president of the Chamber of Commerce of the United States, 
that we have been very much interested in the several suggestions 
presented in the reports that are before this Conference, and I desire 
to say emphatically that the Chamber of Commerce of the United 
States and the business men of the country will welcome the oppor- 
tunity to cooperate with the representatives of our sister Republics 
in doing all possible to bring into practical effect the suggestions 
that have been made. [Applause.] 

A Latin- American Delegate. I think, Mr. Chairman, we should 
not be selfish, and on behalf of the Latin- American countries I arise 
to thank the American Government and the American authorities 
for all the kindness extended to us — and not only the gentlemen of 
the United States but also the other gentlemen from South America — 
and for all the intelligent work they have done during this week with 
us. [Applause.] 

Secretary McAdoo. Those who favor the adoption of the motion 
will say " aye." 

(The motion was unanimously adopted.) 

ADOPTION OF UNIFORMITY OF LAWS REPORT. 

Secretary McAdoo. Gentlemen, I will put the question of the 
adoption of the report of the Committee on Uniformity of Laws. 
Those in favor of the adoption of that report will say " aye " ; those 
against it, "no." 

(The report was unanimously adopted.) 

Mr. Moore. I now have the honor to present some supplementary 
resolutions, which we have not had opportunity to have printed. 

ADOPTION OF TRANSPORTATION AND COMMUNICATION REPORT. 

Gov. Francis. Beg pardon, Mr. Chairman, did you submit to the 
Conference some action on the report of the Committee on Trans- 
portation ? 



288 PAN AMERICAN FINANCIAL CONFERENCE. 

Secretary McAdoo. The report itself was not formally adopted 
by the Conference, because it has some conflicting provisions in it, 
and I felt it ought to be treated like the group committee reports; 
that is, submitted for information and suggestion for future action. 
But your resolution, which explains the attitude of this Conference, 
was adopted ; and that seemed to me to be the wisest disposition of 
the matter. However, if you desire to have the report of the trans- 
portation committee put to a vote, I shall be very happy to do it. 

Gov. Francis. I do not wish to raise any controversy in regard 
to that. 

Secretary McAdoo. Those in favor of the adoption of this report 
will say " aye " ; those opposed, " no." There seems to be one vote 
against it and two for it, so we will consider it adopted. [Laughter.] 

Gov. Francis. What I wished to call to your attention and to the 
attention of the members of the Conference, is that you declined to 
follow the suggestion of that committee, which was to appoint a 
permanent committee. Now, I can understand very well your 
modesty in that as in all other things, but I think this Conference, 
before adjourning, should adopt some method whereby the recom- 
mendations of that report can be put into practical operation. I 
do not know whether or not you would entertain a resolution asking 
the foreign delegates to present that report to their respective gov- 
ernments, and a resolution asking you to present it to the Congress 
of the United States. If so, I desire to offer such a resolution. 

Secretary McAdoo. Governor, all of these proceedings will take 
this course. The foreign delegates will, of course, present these re- 
ports to their respective Governments. The Secretary of the Treas- 
ury, will make a full report of the proceedings of this Conference to 
Congress, which will take such action on that report as it sees fit. I 
did not feel, gentlemen, that the Secretary of the Treasury of the 
United States should appoint a committee from foreign countries to 
deal with matters in their own States. Therefore I ask to be excused. 
The who]e subject, I think, will be covered in the natural course of 
events anyway. Here are suggestions which each one of the govern- 
ments will consider, and out of these suggestions we hope will come 
some happy solution of the problem. 

MISCELLANEOUS MATTERS. 

Dr. Gonzales (Ecuador). Mr. Chairman and gentlemen, our 
committee has suggested something which, I think, is very interest- 
ing and important, namely, the issuance of a Pan American 
postage stamp to commemorate this meeting, to be used in all of the 
countries during a certain period. I wish to add that I would like to 
see the picture of the Secretary of the Treasury on that stamp. [Pro- 
longed applause.] I fancy that everybody in America will know you, 



PROCEEDINGS. 289 

because I believe that this meeting is the first step in a new era of 
Pan American international trade, and I feel that no one country 
will refuse to vote favorably on this proposition. 

Secretary McAdoo. Gentlemen, I am exceedingly flattered by this 
suggestion. 

Gov. Francis. Mr. Secretary, put the motion yourself. 

Secretary McAdoo. Pardon me just one moment. I am exceed- 
ingly flattered, but I am quite sure our distinguished friend from 
Ecuador will appreciate my reluctance to accept the suggestion to 
advocate the adoption of any such resolution when I explain one 
fact to him that is well known in the United States. No man's pic- 
ture is allowed to go upon a postage stamp in this country until he 
has been dead some time. [Applause and laughter.] I am sure that 
you do not want me to advocate my own death; and, as I hope I 
am not yet considered a " dead one," and that I may not be a " dead 
one " for a good many years to come, I am quite sure you will excuse 
me from putting the motion. 

Dr. Gonzales. If that is not possible, Mr. Secretary, I would sug- 
gest the map of the Western Hemisphere might be put on the stamp. 

Secretary McAdoo. I trust you will excuse me for treating the 
matter somewhat facetiously. I feel sure you will, when you under- 
stand what our law is. 

That is one of the many very admirable suggestions submitted 
which, in turn, will be considered by our Government and by your 
respective Governments, and if in any way it can be brought about 
it will be adopted. 

Dr. Gonzales. I wish, anyway, to leave a record of that. 

Secretary McAdoo. I thank you, sir. 

MOORE RESOLUTIONS REGARDING INTERNATIONAL HIGH 

COMMISSION. 

Mr. Moore (continuing). I beg leave to present the following 
resolutions which, as I stated, we have not had an opportunity to 
have printed: 

Resolved, That it is the sense of this Conference — 

1. That the local members of the international high commission should be 
immediately appointed by their respective ministers of finance. 

2. That the members of the international high commission appointed in each 
country should immediately begin preparatory work, and that the various Gov- 
ernments be requested, through their appropriate departments, to cooperate 
in the work of the commission. 

3. That pending the establishment of the bureau in the Pan American 
Union, as recommended in the report of the committee on uniformity of laws, 
the president of this Conference be requested immediately to appoint a gen- 

98257°— 15 19 



290 PAN AMERICAN FINANCIAL CONFERENCE. 

eral secretary to the international high commission to perform such duties 
as are necessary in the preparatory work of the commission. 

4. That the United States members of the international high commission 
should as soon as practicable proceed to visit the other American countries to 
meet the members of the commission there resident. 

Secretary McAdoo. Gentlemen, you have heard the resolutions. 
Those in favor say "Aye"; those opposed, "No." 
(The motion was unanimously adopted.) 

MISCELLANEOUS BUSINESS. 

Secretary McAdoo. As we are now approaching the end of the 
Conference, I wish to say that if there are any other resolutions 
which any gentleman desires to offer it may be done now. 

Mr. Roger W. Babson (Boston). May I ask, Mr. Chairman, if you 
would consider a motion to have the Secretary of the Treasury 
appoint a committee from this country on a shipping bill, to start it 
along the same lines that Mr. Moore suggested starting the plan for 
the uniformity of laws? 

Secretary McAdoo. I think it would be unwise to do that. It 
seems just a bit outside of the scope of this Conference. The ship- 
ping question here has become very much of a political question, 
and I am most anxious that politics shall not be injected into this 
meeting in any form at all. [Applause.] 

Are there resolutions of any kind or motions anyone wishes to 
make? Does any gentleman desire to say anything before we take 
up the last phase of the Conference? If not, then permit me to say 
a few words in conclusion. 

CONCLUDING REMARKS OF SECRETARY OF THE TREASURY. 

First of all, I wish to return my most sincere and heartfelt thanks 
for the resolutions you have passed to-day in which you are good 
enough and generous enough to make complimentary allusions to 
your presiding officer, and to say that I feel deeply touched not only 
by those resolutions, but also by the exceeding great courtesy, kind- 
ness, and consideration which you have shown to me throughout this 
notable gathering. 

In conducting this Conference I have felt that it was not my part 
to seek in any way to impress my views upon this gathering; that, on 
the other hand, I should simply use whatever power I possess to 
encourage as free an expression of views on your part as you might 
care to give. It has been my earnest desire that each one of you 
should leave here with the feeling that there has been no attempt on 
the part of your chairman to interfere in the slightest degree with 



PROCEEDINGS. 291 

the free and untrammeled expression of your views and opinions, 
and I hope, gentlemen, that you will at least credit me with having 
conducted the Conference along these lines with strict impartiality. 
[Applause.] If I have failed in doing so, it is because my poor 
powers have not enabled me to do better. 

"We do not want all the effort and work of this Conference to " go 
up in smoke." I did not expect when this Conference was conceived 
that we should get the fruit of it by the time it adjourned. On the 
contrary, we know as a fact, in nature as well as in the affairs of life, 
that in order to secure the fruit, seed have to be planted, and after 
the seed have been planted they must be cultivated in a practical, 
efficient, and intelligent manner. What I hoped we could accomplish 
was to plant some genuine seed — seed that have within them the 
elements of life, seed that are vital with potentialities — so that by 
intelligent cultivation along practical lines we would in due season 
reap the fruit of our efforts; and I do not mean fruit of a material 
sort only, although, as I said in my opening remarks, a wholesome 
materialism is essential to the prosperity and happiness of the people 
of every nation, but I mean fruit, also, of that finer and nobler 
quality which represents the cardinal principles of truth and moral- 
ity — fruit which we may eat with the knowledge and in the confi- 
dence that it is going to make us stronger in unity of purpose and 
community of ideals and more powerful for the promotion of the 
peace of mankind. Let us hope that we have laid here the secure 
foundations for enduring peace — in the northern and southern conti- 
nents of this hemisphere, at least [applause] — and that, having 
accomplished that, we may set an example to the world of high 
political, material, and industrial morality through which there may 
be brought in time to our unfortunate neighbors of the Eastern 
Hemisphere the beatitude of restored and perpetual peace and pros- 
perity. [Applause.] 

I believe, gentlemen, that you have through your group reports 
planted some very vital seed and that you will certainly reap a 
harvest if we get the right sort of cultivators. "We have got to see 
to it that after we adjourn to-day this work is going to be kept up. 
I am very happy that the Committee on Uniform Laws has adopted 
the suggestion made in my speech at the opening of this Conference 
for the appointment of a joint high commission to cooperate with the 
Pan American Union for the purpose of bringing about the great 
reforms outlined in their report. 

The committee has suggested an admirable way of securing quickly 
the appointment of this international high commission, namely, that 
the finance minister of each country appoint a commission of nine 
men to continue the work so auspiciously begun here. The Secretary 



292 PA1ST AMEKICAN FINANCIAL CONFERENCE. 

of the Treasury in the United States corresponds to the finance min- 
ister in other countries, and I assume, Mr. Chairman [addressing Mr. 
John Bassett Moore] , that you mean to include him in your descrip- 
tion of finance minister and expect him to act for the United States. 
[Mr. Moore replied, " Yes."] 

I shall be very happy to appoint such a commission in this country. 
Of course, it will have no official status, but it will have character and 
standing as a committee acting under the authority of this Conference, 
and I hope that the finance minister of each of the countries repre- 
sented here will take similar action and appoint similar commissions. 
When this has been done a joint high commission will be constituted 
by voluntary action and may present the report of this Conference 
to their respective countries and seek such governmental aid and 
action as may be necessary to carry out the objects in view. 

Much of the success of this Conference has resulted from the group 
conferences through which the delegates from each of the Latin 
American countries have been brought into close contact with a com- 
mittee of representative financiers and business men of the United 
States, with a resulting interchange of views at close range and 
under conditions where the problems of each country could be 
thrashed out and the difficulties and impediments in the way of more 
extended trade, commerce, and intercourse between them developed. 
The group committees in this country should be made permanent, 
and if I may be permitted to say so, the delegates of each of the 
countries represented here should be continued as group committees 
in their respective countries, for the time being, so that they may keep 
in touch with each other and continue the good work we have started 
here. 

I am going to take the liberty, therefore, of appointing in this 
country group committees of able and reputable men of the United 
States to replace the group committees which were appointed to 
serve during the sessions of this Conference. These will have to be 
selected with great care. I wish I could continue the group com- 
mittees already organized, but since there are officials of this Gov- 
ernment on these committees, you can readily understand that the 
conditions under which these committees must act in the future make 
it impracticable, if not inadvisable, to have representatives of this 
Government on them. Eighteen new group committees in this coun- 
try will be selected as quickly as possible, and one will be assigned 
to each of the countries represented in this conference. While these 
committees will have no official status, they will have a recognized 
standing in this country and in your countries, I hope, so that when 
you have matters upon which you wish to secure information, or 
which you may wish to submit for the consideration of financiers, 



PKOCEEDINGS. 293 

merchants, or manufacturers in the United States, you will have a 
committee in the United States through which you may get such 
information or get into contact with our people. As before stated, 
I would suggest that the delegates of your respective countries con- 
tinue to act as group committees, or that similar committees be 
appointed in your countries, so that our people may have a recog- 
nized channel through which reliable information may be obtained. 

The committees for the United States will be announced later. I 
shall try to form them in such a way that they will be live committees 
and continue to do effective work. [Applause.] 

Before you leave this country for your homes I hope to be able to 
announce these committees, so that you may know just what the 
organization here is to be. In this connection I desire to say that I 
shall take the greatest pleasure in suggesting to the President that in 
his next message to the Congress he refer to the work of this Pan 
American Financial Conference, and make appropriate recommenda- 
tions for carrying on the work so auspiciously begun here, and that 
sufficient appropriations be made for the purpose. If we can get 
that done, we can give a great impulse to the work in this country 
[applause], and I sincerely hope that you on your part will make 
similar recommendations to your Governments and induce them to 
take similar action. 

By this means and by coordinating the work of these various com- 
mittees and proceeding along common lines of mutual interest and 
in cooperation with the Pan American Union — and I know my dis- 
tinguished friend, John Barrett, will gladly pull with us — I am quite 
sure that we can put enough ginger into this movement to get practi- 
cal results, and that is what we want. We do not want our work to 
expire with this Conference. We want every man here to put all 
the force into it that he individually possesses and all the influence 
and enthusiasm that he commands in order to realize the great results 
we are trying to achieve. 

Now, gentlemen, I want, in conclusion, to assure you again of my 
most cordial appreciation of your coming here, and to you gentlemen 
of Latin America do I feel most deeply indebted for all the time, 
patience, and toil that you have given to the work in hand. We are 
most grateful to you for coming such a long distance to join us in 
these deliberations. 

I hope that you will have a delightful trip through our country. 
We have tried to arrange a journey that will give you a small under- 
standing, at least, of the greatness of our resources, our industries, 
and our economic development. In the first part of the trip I am 
sorry to say that I shall not be able to accompany you, but I am 
trying to arrange my plans to join you, if possible, in Chicago and 



294 PAN AMERICAN FINANCIAL CONFERENCE. 

make the remainder of the journey with you. I hope I may succeed 
in doing that. [Prolonged applause.] 

I am going to ask Secretary Bryan if he will not say a few words 
to you in conclusion. 

REMARKS BY THE SECRETARY OF STATE. 

Secretary Bryan. Mr. Secretary and gentlemen of the Conference, 
it has during the past two years given me great pleasure to support 
the Secretary of the Treasury in the very important work which he 
has done in connection with domestic problems, and in this interna- 
tional work which he has conceived and brought to such a successful 
consummation he has also had my most earnest and sympathetic coop- 
eration. I am sure that no one who has had to do with this meeting 
has found more satisfaction than I have in the very obvious results 
that have thus far been accomplished. It was not to be expected 
that you would be able to complete all the work that has been under- 
taken. In fact, as I have thought of this meeting I have been re- 
minded of the school events that are associated with this period of 
the year. This is our " commencement " season, the commencement 
being the conclusion of the course of study. The word commence- 
ment has been chosen to describe these exercises because it is under- 
stood that the training prepares the student for the work which lies 
before him — the work which he is about to begin. I shall remember 
this meeting as a commencement exercise, not as the conclusion of 
our work. 

You have been brought together here and have become acquainted, 
and this acquaintance will, I doubt not, in many cases ripen into a 
friendship that will not only give pleasure to those in attendance, 
but will have a substantial and material basis also in the good which 
our respective countries will derive from it. 

I congratulate you upon having laid the foundation; I am sure 
the superstructure will be all that you can hope for. You have 
learned a very important lesson at this Conference, namely, that 
there is a sympathetic relationship binding the United States to all 
of the sister Republics and binding each of them to every other one. 
Upon this sympathetic relationship we shall construct the enduring 
edifice of Pan American solidarity, which means so much to all of 
our nations. [Applause.] 

You have, it is true, gone to considerable expense and given con- 
siderable time to this meeting, but nothing that is of value can be 
accomplished without effort. As we look back over our lives our 
memories dwell with most satisfaction upon those occasions which 
have drawn out that which is best in us; if this be true, then I am 



PKOCEEDINGS. 295 

sure that this week will be a bright one in the memory of all Avho have 
participated, for this gathering will result in a larger acquaintance, 
a closer intimacy, and a mutual helpfulness that will add greatly to 
the happiness of all. I thank you. [Prolonged applause.] 

Secretary McAdoo. Gentlemen, the formal work of the Conference 
now being concluded and the commencement begun, I will declare 
the conclusion finished ! [Laughter.] I now declare the Pan Ameri- 
can Financial Conference adjourned. We shall meet you all this 
evening at 8 o'clock at dinner I hope. [Applause.] 

(With this the seventh and closing session, the Conference was 
adjourned.) 



REPORTS OF GENERAL 
COMMITTEES 



297 



REPORT OF THE GENERAL COMMITTEE ON 

UNIFORMITY OF LAWS RELATING TO TRADE, 

COMMERCE, AND INTERNATIONAL 

COMMERCIAL COURT 



299 



REPORT OF THE GENERAL COMMITTEE ON" UNIFORMITY OF 
LAWS RELATING TO TRADE, COMMERCE, AND INTERNA- 
TIONAL COMMERCIAL COURT, APPOINTED TO CONSIDER AND 
REPORT UPON (1) THE SUBJECTS TO BE DEALT WITH BY THE 
GENERAL COMMITTEE, AND (2) THE ORGANIZATION NECES- 
SARY TO CARRY INTO EFFECT THE RESOLUTIONS OF THE 
CONFERENCE. 



I. Subjects. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir: The committee has not taken into consideration the subject of 
transportation, which should, in its opinion, be kept separate and 
distinct and be dealt with independently. 

The subjects which should, in the opinion of the committee, be 
dealt with in the report of the committee to the conference are : 

1. The establishment of a gold standard of value. 

2. Bills of exchange, commercial paper, and bills of lading. 
(Note the results of the two European conferences on these sub- 
jects.) 

3. Uniform (a) classification of merchandise, (h) customs regu- 
lations, (c) consular certificates and invoices, (d) port charges. 

(See the report adopted by the Fourth International American 
Conference, at Buenos Aires, 1910.) 

4. Uniform regulations for commercial travelers. 

Consider in this relation the question of a certificate to be issued 
by the proper department of the Government of the country from 
which the traveler comes that the bearer is a bona fide commercial 
traveler, this certificate to be properly viseed. 

5. To what extent further legislation may be necessary concerning 
trade-marks, patents, and copyrights. (See the treaties adopted by 
the Fourth International American Conference.) 

6. The establishment of a uniform low rate of postage and of 
charges for money orders and parcels post between the American 
countries. 

7. The extension of the procedure of arbitration for the adjustment 
of commercial disputes.* 

II. Organization. 

1. That for the purpose of carrying into effect the resolutions of 
the conference, and particularly for bringing about uniformity of 
laws on the subjects embraced in those resolutions, there be estab- 
lished an international high commission, to be composed of not more 
than nine members, resident in each country, to be appointed by the 

* This clause was drawn up later by Mr. Moore and unanimously adopted. 

301 



302 PAN AMERICAN FINANCIAL CONFERENCE. 

minister of finance of such country. The aggregate members thus 
appointed shall constitute the commission. 

2. That for the purpose of aiding the International High Commis- 
sion and coordinating its work there be created in the Pan American 
Union a bureau, whose chief shall receive a salary of not less than 
$5,000 (gold) per annum; and it is recommended that, in view of his 
initiative in bringing about the conference, the governing board of 
the Pan American Union invite the Hon. William G. McAdoo, Sec- 
retary of the Treasury of the United States, to suggest the name of 
the first chief of this bureau. Expenses of the bureau, including the 
salaries of the chief and his assistants, to be paid by the Pan Ameri- 
can Union, in whose budget a corresponding increase shall be 
included. 

3. The American Governments are requsted to instruct their diplo- 
matic and consular officers and their commercial attaches to cooperate 
with the International High Commission and with the bureau. 

The bureau shall be authorized to obtain in each country such 
expert assistance as may be necessary to the prosecution of its work, 
the expenses thus incurred to be treated as a part of the expenses of 
the bureau. 

. 4. The bureau shall make to the governing board of the Pan 
American Union, for distribution among the Governments con- 
cerned, and to the International High Commission, an annual report. 

The bureau shall make to the next International American Con- 
ference a full report of its proceedings up to that time, with recom- 
mendations as to future work. 

(Signed) William C. Redfield, Chairman. 

Samuel Hale Pearson. 
Ignacio Calderon. 
Amaro Cavalcanti. 
Luis Izquierdo. 
Santiago Perez Triana. 
Roberto Ancizar. 
John M. Keith. 
Pablo Desvernine y Galdos. 
Francisco J. Peynado. 
Vicente Gonzales B. 
Juan S. Lara. 
Leopoldo Cordova. 
Pedro Rafael Cuadra. 
Ramon F. Acevedo. 
William Wallace White. 
Isaac Alzamora. 
Alfonso Quinonez M. 
Carlos Mar£a de Pena. 
Pedro Rafael Rin cones. 



REPORTS OF GENERAL COMMITTEES. 303 

(Members representing the United States:) 

Charles S. Hamlin. 
John Barrett. 
Charles A. Conant. 
David R. Francis. 
John Hays Hammond. 
John Bassett Moore. 
George N". Ntjmsen. 
W. L. Saunders. 
Willard Straight. 
Benjamin Strong, Jr. 
Samuel Untermyer. 
Robert W. Wooley. 
Claud De Baun, 

Committee Secretary, 

SUPPLEMENTARY RESOLUTIONS OFFERED BY THE HON. JOHN 

BASSETT MOORE. 

After the report of the Committee on Uniformity of Laws had been 
read and unanimously adopted, the Hon. John Bassett Moore pre- 
sented the following additional resolutions, which were unanimously 
adopted at the afternoon session of Saturday, May 29, 1915 : 

Resolved, That it is the sense of this Conference — 

1. That the local members of the International High Commission should be 
immediately appointed by their respective Ministers of Finance. 

2. That the members of the International High Commission appointed in 
each country should immediately begin preparatory work, and that the various 
Governments be requested, through their appropriate departments, to cooperate 
in the work of the commission. 

3. That pending the establishment of the bureau in the Pan American Union, 
as recommended in the report of the Committee on Uniform Laws, the president 
of this Conference be requested immediately to appoint a general secretary 
to the International High Commission to perform such duties as are necessary 
in the preparatory work of the commission. 

4. That the United States members of the International High Commission 
should, as soon as practicable, proceed to visit the other American countries 
to meet the members of the commission there resident. 



REPORT OF THE GENERAL COMMITTEE ON TRANS- 
PORTATION AND COMMUNICATION 



08257°— 15 20 305 



REPORT OF THE GENERAL COMMITTEE ON TRANSPORTATION 
AND COMMUNICATION, SUBMITTED TO THE PAN AMERICAN 
FINANCIAL CONFERENCE AT THE SESSION OF SATURDAY 
AFTERNOON, MAY 29. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir: Your committee on transportation and communication re- 
solved that a subcommittee, to be composed of one member from each 
of the South American countries represented on the general com- 
mittee, confer and report back any plan or plans for the inaugura- 
tion of more regular, rapid, frequent, and up-to-date communication 
between these countries and the United States which seemed to them 
practical of accomplishment. 

This subcommittee, composed of Messrs. Aldao, Cavalcanti, Gon- 
zales, Alzamora, Cosio, and Vergara, submitted two reports, one 
signed by Messrs. Aldao, of Argentina; Cavalcanti, of Brazil; and 
Cosio, of Uruguay ; and the other by Mr. Vergara, of Chile. 

These two reports are designated respectively as "A" and " B." 

Report "A," submitted to the general committee on transportation 
and communication by Messrs. Aldao, Cavalcanti, and Cosio : 

The Pan American Financial Conference begs to suggest the advisability of 
calling for bids not later than December 31, 1915, for the establishment of a 
regular line of fast mail steamers between United States ports and Rio de 
Janeiro, Montevideo, and Puenos Aires, under the following conditions: 

Steamers to have at least 10,000 tons displacement ; to make at least two trips 
per month, with accommodations for at least 150 first-class cabin passengers; 
with refrigerating arrangements; and to complete the trip between United 
States ports decided upon and Buenos Aires, pier to pier, in not more than 15 
days. 

Bidders to state the compensation demanded, and the period of the contract. 

As part of the compensation for services rendered, said vessels to be exempt 
for five years from all fiscal charges in the respective countries and to enjoy 
all facilities granted to any' other vessels. 

Bids to be acted upon within three months and preference to be given, all 
other conditions being similar, to whoever will provide for earlier inauguration 
of the service. 

The Governments of the respective countries to agree upon the proportionate 
charges to be paid by each and upon all other details. 

(Signed) Aldao. 

Cavalcanti. 
Cosio. 

Eeport "B," submitted to the general committee on transportation 

and communication by Mr. Vergara, of Chile : 

In the conference of to-day of the subcommittee, the Minister of Finance of 
Uruguay, Dr. Cosio ; the delegate of Argentina, Dr. Aldao ; and tbe undersigned 
delegate of Chile formulated three separate projects for the establishment of 
fast maritime transportation between the interested countries. 

307 



308 PAN AMERICAN FINANCIAL CONFERENCE. 

Iu view of this fact and of the circumstance that the delegates of Colombia, 
Venezuela, Panama, and the Republics of Central America had expressed in the 
general meeting of the conference that their respective countries for the present 
have no interest in the proposed question it was agreed : 

(a) That there should be only two lines of fast steamers; one to serve the 
ports of Brazil, Uruguay, and the Argentine Republic, and the other to serve 
Ecuador, Peru, and Chile. 

(&) That the conditions affecting said lines are different. 

(c) That the delegates from countries on the east coast of South America and 
the delegate from Chile should present their views on the question separately. 

The delegate of Peru, Dr. Alzamora, stated that, notwithstanding he concurs 
in the proposition of the delegate of Chile, he is unable to sign this report, be- 
cause he has no instructions from his Government, having been accredited to 
the conference by cable. 

The delegate of Ecuador, Dr. Gonzales, approves the general idea of the 
Chilean delegate, but he can not sign the report, lacking the necessary authoriza- 
tion from his Government. 

The delegate of Chile is of opinion that the conference may, nevertheless, 
recommend to the interested Governments that a fast maritime transportation 
service between the ports of South and North America may be supplied as 
follows : 

(1) By the organization of a large company, subscription to the capital of 
which may be made by the public, the balance of the stock, if any, to be taken 
by the Government of the United States and the Governments of those Latin- 
American Republics interested, in a proportion to be agreed upon. 

(2) The company to be incorporated under the New York laws, but the steam- 
ers to be registered in the different countries in proportion to the capital sub- 
scribed, and shall fly the flag of said country. 

(3) For the purposes of customs laws the steamers to be considered as of the 
nationality of the port, except the coastwise trade, in those countries where that 
trade is reserved for nationals. 

(4) The vessels to fulfill certain conditions, e. g\, minimum tonnage of 5,000 
tons; minimum speed of 16 miles per hour. 

(5) The board of directors shall be composed of representatives appointed by 
the respective countries in proportion to the capital subscribed. 

(6) The payment of the capital subscribed may be made in cash or by transfer 
of vessels belonging to the Government subscribing provided said vessels are 
suitable. 

( Signed ) Vergaba. 

The transportation committee recognizes the paramount impor- 
tance of the transportation question and believes that the establish- 
ment of improved regular facilities is an imperative necessity to the 
expansion of the commercial and financial relations between the 
United States and the Eepublics of South and Central America. 

The committee further realizes the complexity of the problems 
which the subject involves and recommends as an aid to their solution 
the reports of the subcommittees representing the east and west 
coasts of South America, with its approval of the general suggestions 
contained in such reports. 

It earnestly recommends the serious consideration of such sugges- 
tions as practical propositions tending toward a prompt solution of 
the problems presented. 

In order to insure continuous action and to avoid delays it recom- 
mends the appointment by the chairman of the Pan American Finan- 
cial Conference of a permanent committee, to be composed of repre- 
sentatives from the United States and from Argentina, Brazil, Uru- 



REPORTS OF GENERAL COMMITTEES. 309 

guay, Chile, Ecuador, and Peru. It should be the duty of this com- 
mittee to obtain and furnish information pertinent to the subject and 
to take such other steps as in its discretion may seem fit or necessary 
to put into effect the plans outlined in the reports of the subcom- 
mittees above alluded to and further to consider and report to the 
chairman of the Pan American Financial Conference any other feas- 
ible, effective plan for the establishment of the desired expansion of 
shipping facilities. 

In conclusion, it is the unanimous conviction of the committee that 
such plans should be adopted as will most speedily establish direct, 
effective, and permanent transportation facilities between the United 
States and the Republics of South and Central America. 

Washington, D. C, May 28, 1915. 

(Signed) S. Hale Pearson, Chairman. 

E. C. Aldao. 

V. VlLLAMIL. 

John E. Zimmermann. 
Amaro Cavalcanti. 
l. izquierdo. 

AuGUSTO VlLLANUEVA. 

gonzalo vergara bulnes. 
Vicente Gonzales. 
Isaac Alzamora. 
Eduardo Higginson. 
Pedro Cosio. 
Gabriel Terra. 
Carlos Maria de Pena. 
David E. Francis. 
Edward N". Hurley. 
Franklin Q. Brown. 
Paul Fuller. 
George W. Norris. 
E. Goodwin Ehett. 
Sol Wexler. 
Harry A. Wheeler. 
J. G. White. 

Claud De Baun, Committee Secretary. 



GROUP CONFERENCE 
REPORTS 



311 



ARGENTINA 



313 



ARGENTINA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference, 

Sir: The committee has held four well- attended conferences, the 
Hon. Samuel Hale Pearson acting as chairman of the meetings. 

There was a very full review of the topics suggested by the Honor- 
able Secretary of the Treasury and a discussion of those points in 
this list of topics which, in the opinion of the committee, were felt 
to have the broadest influence upon the question of better commercial 
relations between the United States and Argentina. It was recog- 
nized by the committee that as a fundamental proposition the only 
basis upon which commerce and banking can be successfully devel- 
oped must necessarily rest upon the principle of fairness and a 
reciprocity of advantages. 

After dealing with these subjects in a general way the discussion 
centered upon the following general headings : 

/. Transportation. — With a view to establishing more regular and 
quicker transportation facilities for the movement of mails, passen- 
gers, and parcels, i. e., high-class commodities. 

//, Cheaper telegraphic communication. — In connection with this 
subject it was pointed out that the United States has no direct 
American lines with Argentina except through the west coast cables 
in connection with transandine telegraph lines. Direct cable com- 
munication involves cooperation on the part of Brazil as well as on 
the part of Argentina and the United States. 

///. Trading facilities. — In this connection it was pointed out that 
it would be futile for manufacturers and merchants in the United 
States to attempt to increase their trade with Argentina so long as 
they were compelled to deal through houses representing rival 
nations. 

This subject was viewed from two standpoints. 

First. The necessity of promoting in every way possible and by 
friendly and voluntary arbitration the settlement of claims or dis- 
putes between parties engaged in commercial transactions between 

315 



316 PAN AMERICAN FINANCIAL CONFERENCE. 

the two countries. The committee concluded that it should call in 
the assistance of the United States Chamber of Commerce and the 
Buenos Aires Chamber of Commerce to recommend to their respec- 
tive members the adoption of a standard form of agreement in 
respect to settlement of trade disputes or claims by arbitrators ap- 
pointed by these chambers, the arbitration in each case to be held 
where the contract was to have been fulfilled. 

The committee decided that the arbitration of these trade disputes 
was of so great importance that the two Governments should be 
requested to give this proposal the force of law. 

The committee also considered in this connection amendments re- 
quired in commercial laws, but no resolution was adopted, because 
this topic had already been referred to a special committee. 

Second. The necessity for the establishment in Argentina of 
American wholesale houses and of exhibition rooms and warehouses 
which would adequately represent and make known the manufactur- 
ers and merchants of the United States. This, it was pointed out, 
was especially necessary in facilitating the business of those manu- 
facturers and merchants whose foreign trade was not sufficiently 
large to justify the establishment of individual branches. 

IV. Increased banking facilities. — By which was meant facilities 
which would put manufacturers and merchants of the United States 
on a parity with the manufacturers and merchants of the European 
countries who are now well represented with banking facilities. 

After a discussion of the above topics, they were disposed of in a 
concrete manner by the passage of resolutions which are herein 
embodied. 

TRANSPORTATION. 

Whereas in order further to develop the friendly, personal, politi- 
cal, and commercial relations already happily established between the 
Argentine Eepublic and the United States of America it is the unani- 
mous opinion of the members of the Argentine group committee of 
the Pan-American Financial Conference that increased facilities are 
essential between the two countries for the interchange of passenger 
traffic and the more rapid carrying of mails, 

Now, therefore, be it resolved, That the special committee of the Pan 
American Financial Conference to consider improvement in means of 
transportation and communication should be asked to recommend to 
the general meeting of the conference the passage of a resolution 
recommending that the respective Governments of the United States 
and the countries in the southern part of South America should be. 
requested to cooperate in contributing in such way as may be feasible 
and expedient toward equalizing the increased cost — as compared 
with operating ships between European and the United States 
ports — of wages, officers' salaries, foods, and other items of operating 
expenses and maintenance — with a view to securing the establishment 



GROUP CONFERENCE REPORTS ARGENTINA. 317 

and. regular operation of sufficiently fast mail steamers, with ade- 
quate passenger, mail, and high-class cargo accommodations, between 
ports in the United States and ports in the countries so cooperating. 

CHEAPER TELEGRAPHIC COMMUNICATION. 

Whereas in view of the great distance and slow mail facilities 
existing between the Argentine Republic and the United States, the 
matter of quick communication between the two business communi- 
ties is of vital importance to the development of trade, 

Now, therefore, he it resolved, That this conference bring to the 
attention of the Governments of both nations the need for cheaper 
telegraphic communication and that they be urged to take any proper 
andnecessary action tending toward the establishment of lower rates 
for direct telegraphic communication in cooperation, when desirable, 
with other Latin American countries. 

TRADING FACILITIES (ARBITRATION OF TRADE DISPUTES) . 

Whereas your committee believes that the utilization of the arbi- 
tration system in accordance with the suggestion of the Argentine 
delegate, Dr. Aldao, will prove of the greatest value in the further 
development of the commercial relations between the countries repre- 
sented in this conference, 

Now, therefore, he it resolved, That this conference records its hearty 
approval of the principle of arbitration of commercial disputes be- 
tween business men and recommends that all countries here repre- 
sented cooperate in the establishment of such a system as soon as a 
practicable plan can be devised. 

TRADING FACILITIES (AMERICAN TRADING HOUSES IN ARGENTINA). 

Whereas in the opinion of your committee it would facilitate and 
assist in developing sales of American manufactured goods in Argen- 
tina if American manufacturers would establish adequate wholesale 
or jobbing houses and proper show or exhibition rooms and ware- 
houses in which manufactured goods could be shown to prospective 
users and from which quick deliveries could be made, 

Noio, therefore, he it resolved, That to facilitate and expedite the 
distribution of their goods, American manufacturers should have 
legal authority to cooperate in export business either by joint 
selling arrangements or by subscribing to securities of wholesale or 
jobbing companies which might establish and operate adequate ware- 
houses and showrooms or unite in such other cooperative effort as 
might be effective in developing export business. 

INCREASED BANKING FACILITIES. 

Resolved, That this committee favors the establishing of such 
banking facilities between the United States and the Argentine 
Republic as will effect a more intimate and reciprocal relation than 
now exists, based upon mutual cooperation and profit. 



318 PAN AMERICAN FINANCIAL CONFERENCE. 

The committee deeply appreciates the opportunity it has enjoyed 
of meeting together and discussing these important subjects, and 
only regrets that the time at its disposal has been entirely inadequate 
to do full justice to subjects of such great importance. 

This committee also desires to take this opportunity of expressing 
its hearty appreciation to the honorable Secretary of the Treasury, 
the chairman of the general conference, for the privileges thus 
granted, and expresses the hope that the relationships thus enjoyed 
may not only ripen into cordial friendships but lead to a better 
understanding of the problems and mutual interests of the twc 
nations. 

Respectfully submitted. 

Samuel Hale Pearson, Chairman. 



BOLIVIA 



31! 



BOLIVIA- 



GRoup CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference, 
Sir : A very full statement of conditions dealing with many of the 
questions suggested for consideration in the official program of the 
Pan American Financial Conference was prepared by the delegates 
from Bolivia prior to the opening of the Conference, as well as a 
separate report upon Bolivian finances, which latter report by reso- 
lution of the group committee has been appended to and made a 

part of this report.* 

. After a general discussion the committee was divided into two 
subcommittees — one to consider the problems of trade and commerce 
and the other the banking and general financial situation of Bolivia — 
and this report is accordingly made under these two subdivisions. 

I. Trade and Commerce. 

Natural resources. — Owing to the extent of its territory, Bolivia 
has a great variety of natural resources which remain almost wholly 
undeveloped. 

Minerals. — Among the most important minerals of Bolivia not 
found in the United States, but in great demand in this country, are 
antimony, tungsten, bismuth, and tin, this last one representing the 
main and most important of the country's exports as well as its 
principal source of revenue. It is hard to explain why the United 
States, being so great a consumer of tin, has never made any real 
effort to import it from Bolivia ; but two reasons at least are evident — 
the one is the want of smelting plants to treat the tin concentrates 
and the other is the high rate of freight and lack of good ocean 
transportation facilities. The Isthmus of Panama was the main 
obstacle to direct and cheap communication with the western coast 
of South America, but the opening of the Panama Canal has re- 
moved this obstacle, and it is now possible to bring freight to the 

* See Exhibit A, page 327. 

•js257°— 15 — 21 321 



322 PAN AMERICAN FINANCIAL CONFERENCE. 

Atlantic ports of the United States from this region without trans- 
shipment. 

The four important minerals mentioned above have hitherto been 
imported by the United States from Europe principally, and the 
present commercial conditions resulting from the war in Europe 
make self-evident the advisability of the United States developing 
a source of supply of these minerals independent of Europe and 
such as is afforded by Bolivia. 

The exploitation of the mines and their development requires 
capital and offers a field of profitable investment to American finan- 
ciers and miners, 

Besides the minerals above mentioned as not found in the United 
States, Bolivia is also rich in copper, zinc, and lead mines, and the 
present limited production of all of these metals would be consider- 
ably increased if sufficient capital were found. 

Live stock. — Recent estimates of the live stock found in two States 
in the eastern part of Bolivia place the number at 80,000 wild and 
20,000 domestic cattle in the Province of Santa Cruz and 130,000 
wild and 50,000 domestic cattle in the Province of Beni. This gives 
some idea of the possibilities of developing the cattle business on a 
large scale. The area covered by the grazing fields is larger than 
the whole State of Texas, and before epidemics killed off some of 
the wild cattle the number was very large. In the high plateau 
region of Bolivia is found a number of kinds of sheep, alpaca, and 
vicuna, whose wool and skin are valuable articles of trade. Capital 
is also needed to develop this branch of Bolivian resources, and rail- 
roads must be built to cheapen transportation. 

Rubber, timber, and fruit. — Rubber is one of the most important 
products of Bolivia. Its exportation has grown steadily, and in 1913 
amounted to more than 5,000 tons. The Bolivian forests in the east- 
ern part of the country, tapped by great navigable rivers, are very 
rich in rubber trees, as well as containing many varieties of cabinet 
woods. What is said above as to the desirability of the United States 
developing sources of supply of metals independent of Europe ap- 
plies with even greater force to the rubber industry where there is the 
added factor of the destruction or failure of trees in the rubber fields 
in other parts of the world. In this same region where rubber is 
found, coffee, cocoa, and all kinds of tropical fruits are abundantly 
produced, but can not be exported for want of transportation 
facilities. 

Railroads. — The vast possibilities of Bolivia have been thus out- 
lined to call the attention of American capital and enterprise to the 
country's need of a more complete system of railroads than it has at 
present. Railroads from the present centers of population to the 
eastern section of the country are of vital necessity, and no greater 



GROUP CONFERENCE REPORTS BOLIVIA. 323 

impetus could be given to the development of that country than to 
carry out the construction of proposed railroads to that section. By 
reason of the fertility of the soil immigrants would find there pros- 
perous homes and encouraging returns for their labor. Moreover, 
railroad building would greatly increase trade relations between the 
United States and Bolivia and by making available the untouched 
wealth of that country would open a profitable field for the invest- 
ment of American capital. 

Interior navigation. — The eastern section of Bolivia being tapped 
by a network of large navigable rivers flowing into the Amazon, a 
line of steamers from New York via the Amazon might well be 
established to reach this section of Bolivia. 

Ocean transportation. — We feel that increased and improved ocean 
transportation is an essential necessity for trade improvement. 

Foreign debts. — As stated in the memorandum submitted by the 
Bolivian delegates, Bolivia, had no foreign debt up to 1908, when a 
loan of £500,000 was negotiated in this country, and two years later 
another loan for £1,500,000 was placed in Paris, and later on a third 
and last loan for £1,000,000 was also placed in Paris. All these loans 
were negotiated for remunerative purposes, such as the organiza- 
tion of a national bank, the construction of a railroad, and other 
public utilities. Bolivia has met regularly all its obligations. The 
interest on the foreign loans and the internal debt does not take more 
than 23 per cent of the national revenues. 

Political situation. — The country, politically speaking, is per- 
fectly peaceful and the regularity of its administration is evidenced 
by its sound financial standing. 

Commercial laws and regulations. — We believe that through the 
proper diplomatic channels there should be brought about a modifica- 
tion of the laws and regulations now existing with regard to trade- 
marks, duties and taxes levied upon samples and against commercial 
travelers, with a view to guaranteeing American patent and trade- 
mark rights, and making duties and taxes more liberal. Moreover, 
we would advocate the abolishment of any duties on advertising 
matter that is not imported for sale. 

The committee cordially indorses the recommendation of the Post- 
master General of the United States that postal rates of the United 
States be made applicable to the Latin- American countries upon a 
reciprocal basis and that a parcel post and money-order system be 
likewise established. 

It is the opinion of the committee that the establishment of tele- 
graphic or wireless communication between the United States and 
Central and South America owned and controlled by citizens of 
North, South, and Central America would have a tendency to facili- 
tate and promote inter- American trade and commerce. The present 



324 PAN AMERICAN FINANCIAL CONFERENCE. 

rates appear to be unusually exorbitant, and this means of com- 
munication under existing conditions is necessarily limited to the 
more important commercial transactions. 

In the interest of a better understanding of conditions the com- 
mittee urgently recommends that the press associations of the sev- 
eral countries give consideration to the question of establishing a 
proper system for the interchange of news, particularly that which 
relates to trade and commerce. 

It is also recommended that proper steps should be taken to 
standardize as far as possible trade requirements of the several coun- 
tries, and if proper bureaus can be established for this purpose the 
standards adopted should be recognized by manufacturers and 
producers. 

II. Banking and Finance. 

Public -finance, — As shown in the statement submitted by the 
Bolivian delegates and printed in the appendix, the revenues of the 
Government of Bolivia are derived primarily from export and 
import duties. These revenues are supplemented by certain local 
taxes and excise duties. There is attached to and made a part of 
this report a copy of statement furnished the committee by the 
Bolivian delegates showing the revenues and expenses of the Gov- 
ernment of Bolivia from the year 1904 to 1913, inclusive ; also state- 
ment of foreign debt as of June 30, 1914, and statement of inland 
debt for the same period.* 

To meet the depletion in revenues incident to the European war 
it was necessary for the Government to reduce salaries of all Govern- 
ment officials 30 per cent, to supplement its revenues by the adoption 
of a stamp tax, and to take other measures. In the interest of 
economy it was found necessary to suspend the operations of all 
legations except those in the United States and South America. 

While the increase in exports since the beginning of the war has 
relieved the situation to a very great extent, it may be necessary for 
the Government of Bolivia to place a loan with investors in the 
United States. As this is a matter for the consideration of private 
bankers or investors, it is not deemed necessary to elaborate in this 
report the status of the public finances of Bolivia, but the statement 
hereto appended, furnished by the delegates from Bolivia, contains 
a very clear and frank resume of the situation. 

The monetary situation. — The Government of Bolivia issues no 
paper currency. The English pound sterling and Peruvian pound 
sterling are made legal tender by statute. As fully explained in 
the appended statement, the money in circulation consists primarily 

* See Exhibit B, page 331. 



GROUP CONFERENCE REPORTS BOLIVIA. 325 

of bank notes issued by four banks mentioned therein. By recent 
legislation only one bank will have the note-issuing power after 
present outstanding notes are retired. 

The Bolivian Government has adopted the gold standard, but does 
not coin any gold money. It is the sense of the committee that the 
adoption of the United States standard of value by the Bolivian 
Government is not practicable at this time by reason of the present 
trade relations with other Governments. If, however, trade with the 
United States can be sufficiently developed to create a proper credit 
balance with the United States, with a resultant demand for Amer- 
ican dollars to make settlement of trade balances, there seems to be 
no reason why ultimately they should not be made legal tender for 
all purposes. 

In the meantime it would have a tendency to promote the develop- 
ment of trade relations and to popularize the American dollar in 
Bolivia if by legislation it can be made legal tender by the Bolivian 
Government for the payment of taxes and impost duties. It would 
likewise contribute to this end if arrangements could be made with 
the proper authorities by which American gold certificates and drafts 
on banks in the United States could be accepted in payment of such 
taxes and imposts, and as an incident to such an arrangement New 
York exchange should be quoted daily in the principal centers of 
Bolivia and Bolivian exchange quoted in New York. 

The present 'banking situation. — The appended statement sets forth 
fully and clearly the banking situation of Bolivia and furnishes very 
convincing evidence of the possibilities of development of the bank- 
ing business along conservative lines. 

In the opinion of the committee the establishment of a bank pos- 
sessing the necessary charter powers to meet local trade conditions, 
the capital for such bank to be furnished jointly by citizens of Bo- 
livia and citizens of the United States, is very desirable. Such an 
institution could be made a strong factor in developing trade be- 
tween the two countries. A commercial department could collect, 
analyze, and furnish proper credit information, and could, by guar- 
anty of local credits, be instrumental in obtaining capital for local 
development. It is not believed that a branch of one of the national 
banks of the United States would possess the necessary charter 
powers to enable it to conform to local conditions and requirements. 

Financing of public improvements. — It is the opinion of the com- 
mittee that the successful financing of national and provincial loans 
necessitates the adoption of some satisfactory medium for dissemi- 
nating information as to the true status of conditions in Bolivia. 
In order for any bank or syndicate to underwrite such loans the 
public of the United States should have a better understanding of 



326 PAN AMERICAN" FINANCIAL CONFERENCE. 

the true conditions. Erroneous impressions have in the past been 
created through the instrumentality of irresponsible promoters who 
have obtained doubtful concessions for the purpose of selling them 
and without either the ability or intention of complying with the 
terms of such concessions. 

Central commercial agency. — The conference about to close will un- 
doubtedly be fruitful of results in many ways, but to obtain speedily 
a practical realization of one of its fundamental purposes, namely, 
the improvement and growth of our financial and commercial rela- 
tions, this committee recommends the organization of a central com- 
mercial agency to conduct its operations in connection with or under 
the supervision of the United States Chamber of Commerce. Its 
purpose would be to disseminate information and serve as a connect- 
ing link between the industries of the different American countries 
and the United States. 

Such an agency could be established after a careful study of the 
reports of the several group committees showing conditions in Cen- 
tral and South America and would prove a valuable medium for the 
investors of the United States as well as the citizens of Central and 
South America who are seeking capital for legitimate and proper 
investment. 

The delegates from Bolivia give every assurance that agents of 
responsible investors will receive the cordial cooperation of the 
Bolivian Government in the legitimate promotion of any proper en- 
terprise, and the appended memorandum furnishes abundant infor- 
mation of the wide field for profitable investment that is afforded by 
the undeveloped resources of Bolivia. 

In presenting this report, accompanied by the memoranda of the 
Bolivian delegates, we must express our earnest wish for the fulfill- 
ment of our hopes for the peace, friendship, and growth of the com- 
mon interests of our countries, and congratulate the Secretary of 
the Treasury upon the success of his worthy endeavors. 

Eespectfully submitted. 

Ignacio Calderon, Chairman. 



EXHIBIT A. 

Memorandum ok Bolivian Finance, 
currency. 

Bolivia is perhaps the only country in South America that never 
has had paper money. Its currency at present is based on the gold 
standard, established by law in 1908. According to it, and until it 
may be possible to mint a national gold coin, the English sterling 
pound and the Peruvian gold money are the only legal tender. 

Bank notes are generally used and form the bulk of the country's 
currency. Silver pieces of the value of 50 cents, 20 cents, and nickel 
money of 5 cents and 10 cents denominations supplement the cur- 
rency in circulation. Gold is very scarce and the banks keep it in 
their vaults as a reserve and guaranty for their notes, the law re- 
quiring 40 per cent of their issues to be represented by gold coin. 
Legally a boliviano is the unit of the monetary system; 12.50 bolivi- 
anos are considered as equivalent to a pound sterling. The silver 
pieces in circulation are 50 cents, of 10 grams weight, and the 20-cent 
pieces, of 4 grams weight, both 833 fine. The original silver bolivi- 
ano was a piece of 425 grains weight and 900 fine, but it is not coined 
any more. 

BANKS. 

There are at present four issue banks and four mortgage banks, 
besides agencies of a German bank at La Paz and Oruro. 

In 1913 Congress passed a law restricting to one bank the right 
to issue notes, but the depression caused by the stringent measures 
taken by the banks whose notes were to be retired compelled Con- 
gress to pass a law last November to extend for 10 years the final 
retirement of all the then outstanding bank notes. 

The law requires keeping as a guaranty for the bank-notes circu- 
lation 40 per cent of their amount and the obligation to redeem them 
for gold on presentation, a requirement not always enforced. 

The combined capital of the four banks of issue is as follows: 



Name of bank. 


Acknowl- 
edged 
capital. 


Paid up. 


Banco Nacional de Bolivia (the oldest bank of Bolivia) 


Bolivianos. 
12,500,000 
12,500,000 
25,000,000 
25,000,000 


Bolivianos. 
8,000,000 


Banco F. Argandona 1 .' 


4,000,000 


'Banco Mercantil 


10,000,000 
18,962,500 


Banco de la Naci6n 





327 



328 PAN AMERICAN FINANCIAL CONFERENCE. 

All of these banks pay regularly good dividends that amount on 
an average to 10 per cent annually. 

They have to pay 8 per cent tax on their net earnings and one-half 
per cent on the average circulation of their notes. 

Notwithstanding the serious crisis caused by the sudden inter- 
ruption of commercial and financial activities on account of the 
war, none of the banks failed to make good profits. The Banco 
JSTacional de Bolivia, after deducting all charges and putting aside 
the annual reserve, paid 5 per cent semiannual dividend on the 31st 
of last December. 

The Banco de la Nacion earned the last six months of 1914 over 
a million bolivianos, but, being the principal provider of foreign 
drafts, its losses on account of the drop in the exchange have been 
very heavy. 

The war in Europe has caused a fall in exchange from 18 \ pence 
per boliviano to about 15 pence. This bank, being a Government 
depository, has had occasion to appreciate the great drop in the 
revenues of the country during the last six months of 1914 and to 
feel the reaction that has commenced owing to the resumption in the 
exportation of tin. 

The amount of bank notes in circulation decreased in 1914 to 
21,490,713 from 24,490,535 bolivianos in 1913. 

The gold in cash in the Banco de la Nacion in December, 1914, 
was £521,901, that at the legal rate of 12.50 bolivianos per pound rep- 
resents 6,537,625 bolivianos against the value of its notes in circula- 
tion, 12,551,361 bolivianos, which represents much more than the 40 
per cent required by law. 

LOANS. 

Bolivia has been free from foreign debts until the year 1908, 
when the first one was contracted with J. P. Morgan & Co. for 
£500,000 at 90 per cent and 6 per cent interest plus 2 per cent amorti- 
zation. In 1910 a loan mainly to establish a bank was placed in Paris 
for £1,500,000 at 87 per cent and 5 per cent interest and 1.10 per 
cent amortization. Finally in 1913 another loan for £1,000,000 was 
placed also in Paris at 90 per cent and 5 per cent interest, 1 per cent 
amortization. This loan was contracted exclusively for a railway 
construction and on account of the war the bankers have not paid it 
yet. The coupons of all these loans have been regularly met. Bolivia 
has also an internal debt that amounts to approximately 1,155,000 
pounds sterling. 

RAILWAYS. 

The first railway in Bolivia was inaugurated in 1902, and is known 
as the Antof agasta-Bolivia Eailway, and belongs to an English com-' 



GROUP CONFERENCE REPORTS — BOLIVIA. 329 

pany. Starting from the port of Antofagasta, in Chile, this road 
reaches Oruro, a city in Bolivia. The length of the road is 934 kilo- 
meters of narrow gauge. 

In 1900 the Bolivian Government undertook the construction of 
a short line from the borders of Lake Titicaca to La Paz, 97 kilo- 
meters, which was opened to traffic in 1903. 

In 1904 a contract was made in New York, the first of its kind ever 
made by any South American country with American capitalists, for 
the building of a system of railroads to unite the north and south of 
the country and also extend them to the eastern section. 

After completing the first line between La Paz and Oruro, a dis- 
tance of 217 kilometers, the contract was transferred by the Amer- 
ican bankers to the English company operating the Antofagasta 
road, and the line from Oruro to Potosi was built by that company, 
a distance of 322 kilometers. 

The line from Oruro to Cochabamba, 209 kilometers, is still under 
construction, but it may soon be finished. 

Another line from Eio Mulato to Tupiza, 241 kilometers, to con» 
nect with the Argentine roads in the Bolivian frontier, is also being 
built and will, when finished, establish an all-rail communication 
between La Paz and Buenos Aires. 

All the work of these lines has been carried through with the 
£2,000,000 contributed by the Government and £3,000,000 by the 
bankers. 

Unfortunately, other very important and necessary roads, such as 
the road from La Paz to the Beni River, from Puerto Suarez on the 
Paraguay Eiver to Santa Cruz, etc., remain in project, and they are 
not only absolutely necessary but would develop the richest and 
most promising sections of Bolivia. 

MINES. 

For the present and notwithstanding the great agricultural possi- 
bilities in Bolivia, mining is, and has been ever since the Spanish 
conquest, the main industry in Bolivia. The country is one of the 
richest in the world in mineral resources. Silver has been for over 
four centuries, commencing with the early days of the Spanish con- 
quest, one of the most important products. The Spaniards found it 
so valuable that they established in Potosi the second mint in all 
America for coining money, the other being that of Mexico. 

Now tin has taken a very commanding place amongst the exports 
of Bolivia, amounting to over 44,000 tons of concentrates. There are 
also rich mines of copper, bismuth, cobalt, zinc, antimony, gold, etc. 
Lately important petroleum deposits have been found in many 
sections of the country. 



330 PAN AMERICAN FINANCIAL CONFERENCE. 

INTERNATIONAL TRADE. 

The growth of Bolivia and its possibilities can be appraised by the 
growth of its foreign trade, notwithstanding all the drawbacks of the 
lack of means of transportation and of population. 

In 1902 the total export and import trade reached only to about 
£3,200,000 a year. In 1913 it reached the sum of about £11,450,000. 

The bulk of the exports went to England, Germany, France, and 
Belgium. The United States received only $392,245, and sent to 
Bolivia from three to four million dollars in round numbers. 

PUBLIC REVENUES. 

The public revenues of Bolivia have also grown considerably. 
They are derived principally from the export and import duties. Tin 
and rubber are the principal articles of export, and as both have been 
almost stopped on account of the war the revenues of the country 
have fallen considerably, making it necessary to take some measures 
to retrench expenses in every way. Salaries have been reduced 
30 per cent and almost every public-utilities work has been stopped. 
Moratoria for a few months were decreed, and as the price of food- 
stuffs commenced to get very high the Government imported large 
quantities of flour and took other measures to meet the emergency. 

GENERAL REMARKS. 

The territory of Bolivia is third in extent after Argentina and 
Brazil, but its population is only about two million and a half. The 
country is perfectly peaceful and orderly. The President is elected 
for four years without reelection, and foreigners enjoy every right 
granted by the constitution to the natives. 

The mining laws, the immigration laws, and the public land- 
grant laws are most liberal. No country offers a better field for 
large enterprises on account of the rich natural products, so abundant 
in mineral as well as in all other branches of industry. Capital is 
urgently needed to utilize the natural wealth which is ready to yield 
handsome returns. 

Besides the mineral resources in the high plateaus, the eastern 
section of Bolivia is wonderfully rich in fertile lands for grazing 
and agriculture and virgin forests watered by many large and navi- 
gable rivers. The study of the country and its possibilities would 
reveal how great is its future and how profitable it would be to help 
its development by the liberal employment of capital and the settle- 
ment of immigrant colonies. 

This very rapid sketch of Bolivia, deficient as it is, no doubt will 
awaken the interest of financiers and industrial men to its pos- 
sibilities as a field for investment. 



GEOUP CONFERENCE EEPOETS BOLIVIA. 



331 



EXHIBIT B. 

National revenues during the last decade 1904-1913. 



Year. 


Revenues. 


Year. 


Revenues. 


1904 


Bolivianos. 
6,838,576 
7,854,698 
10,401,512 
13,166,684 
11,604,063 


1909 


Bolivianos. 
11,847,231 
12,583,232 
16,913,512 


1905 


1910 


1906 


1911 


1907 


1912 


20,164,602 
22,018,874 


1908 


1913 









The above table shows an increase of 230% during the said decade. 

The annual departmental revenues may be estimated at 3,000,000 bolivianos. 

Amounts in bolivianos required for the payment of interests on all debts and for their 

redemption. 

Guarantee of ' ' Bolivia Railway " bonds 750, 000 

Guarantee of " Cochabamba Light & Power " bonds 225, 000 

For interest on and redemption of other loans 3, 360, 62o 

Total 4,335,620 

As the national revenues amount to a total of 22,018,874 bolivianos, the above 
expenditure represents less than 20 per cent of the same, which is certainly a very 
significant proportion. 

Statement of foreign debt on June 30, 1914. 



Date of act 

authorizing 

the loan. 


Loans. 


Inter- 
est. 


Re- 
demp- 
tion. 


Issued 
at — 


Bankers. 


Principal 
amounts 
issued. 


Balances in 
bolivianos 

gold cy. 
at 19 1/55. 


Nov. 28, 1908 
Feb. 3,1910 
Dec. 5, 1912 


Morgan loan,1909. 

French loan, 1910. 

F. C. Tupiza,La 
Quiaca loan. 


Per ct. 
6 

5 

5 


Per ct. 
2 

1.10 

1 


Per ct. 
90 

87 

90 


J. P. Morgan & 

Co. 
Credit Mobilier 

Francais. 
do 


£500,000.00 
1,500,000.00 
1,000,000.00 


5,473,280.83 
17,986,250.00 
12,378,7.50.00 






3,000,000.00 


35,838,280.83 



Statement of inland debt on June 30, 1914. 



Date of act 

authorizing the 

loan. 


Public debts. 


Re- 
demp- 
tion. 


In- 
terest. 


Total issue. 


Balances 

on June 30, 

1914. 


Total 
indebtedness. 


Jan. 17,1907 

Feb. 5. 1910 

Jan. 2,1914 

Dec. 15, 1909 

Jan. 18,1911 

R.S.,May2,1911. 
Jan. 22,1914 


Inland loan bonds 

JMilitary bonds, old issue. 

\Acre and Pacific mili- 
/ tary bonds. 

Acre indemnity bonds. . . 

Government bonds of 
1914. 


Pr. ct. 
1 

2 

3 

1 


Pr. ct. 
3 

8 

8 

3 
8 


Bolivianos. 
4,826,300.00 

348,200.00 

2,077,000.00 

202, 500. 00 
2,775,000.00 


Bolivianos. 
1,453,225.00 

144,000.00 

1,985,400.00 

190,000.00 
2,775,000.00 


Bolivianos. 
2,711,195.81 

144,000.00 

2,099,412.40 

426,898.27 
2,775,000.00 




10,229,000.00 


6,547,625.00 


8,156,506.48 



BRAZIL 



333 



BRAZIL. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir: The committee over which I have the honor to preside, in 
order to give more careful consideration to the questions proposed 
for discussion, was divided into two subcommittees, one on banking 
and laws relating thereto, and the other on trade and commerce and 
laws relating thereto. 

The committee on banking was composed of the following-named 
gentlemen: Messrs. Paul M. Warburg, chairman, W. S. Kies, Fre- 
derico Lage, James B. Forgan, and John Bassett Moore. 

The committee on trade and' commerce was composed of Messrs. 
Caesar Cone, chairman, Charles Sutter, E. W. Rice, jr., E. P. Thomas, 
E. Q. Horton, and Arthur W. Jones. 

The reports of these two subcommittees have been considered by 
the General Committee and were unanimously adopted as a part of 
its report. The reports are here presented, as follows : 

BANKING. 

The subcommittee appointed by the Brazilian group for the con- 
sideration of the subject of banking in general submits the following 
report : 

The subject of banking should be considered under two heads — 
Government and corporate financing, and commercial banking. 
There have been submitted to the conference very explicit reports 
covering the first subject, and it would be mere repetition to con- 
sider this particular subject at length. Commercial banking should 
properly be considered under two heads: (1) Financing transactions 
involving the importation and exportation of goods; (2) local 
commercial banking. 

Financing transactions involving importation and exportation of 

goods. 

The present offers large opportunities for the development of the 
acceptance business between Brazil and the United States, and 
through this development an increase in the exchange of products 

335 



336 PAN AMERICAN FINANCIAL CONFERENCE. 

between Brazil and North America. This acceptance business can 
now be undertaken by all American banks and bankers of standing 
and responsibility, no matter whether they have branches or not. It 
is merely a question of establishing business relations, which of 
necessity will require time to develop. In view of present conditions 
in Europe which render it necessary that relief be given promptly 
and liberally, every effort should be made to develop comprehensive 
business connections as rapidly as possible. 

The branches of American banks thus far established in Brazil 
should be of great service in furnishing needed commercial infor- 
mation and in acting as agencies for the development of commerce. 
These branches should be in a position to serve as the media for 
building up the acceptance business, not only in behalf of the parent 
banks but should act broadly for all banks in their own country. 
Considering the centralization of the coffee business in parts of 
Brazil and of rubber in other portions in the hands of large ship- 
pers, the amounts involved in financing the marketing of these com- 
modities are so large that it may be necessary for groups of Ameri- 
can bankers to act together to obtain satisfactory results. 

Both the large Brazilian and American commission houses and 
the American export and import firms should do their share in 
facilitating the establishment of new relations. These concerns will 
primarily profit from the establishment of a broader discount and 
acceptance market in America, and should in every possible manner 
cooperate in an effort to bring about the desired results. 

Inasmuch as a committee of the conference has been appointed to 
consider the subject of trade laws, this committee does not desire 
to enter into a discussion on that subject. We may point out, how- 
ever, that the development of banking relations will be greatly aided 
by more definite regulations and a clearer definition of the legal 
status of acceptances, indorsements, and protests of commercial 
paper, bankruptcy procedure, warrants and warehouse receipts, and 
the establishment of a more comprehensive system of warehouses. 
There is no doubt that a large amount of American money can be 
made to flow to South American countries if reliable warrants of 
reliable warehouse companies can be given the status of negotiable 
paper, as in this country, and can be freely accepted by banks as 
collateral without risk. 

Local commercial banking. 

The branches of American banks now open and others which it is 
hoped will be opened will be able to render important service in their 
communities by gradually taking up the local banking business in 
the same manner as is done by existing domestic and foreign banks. 

Your committee believes that the United States should encourage 
in every possible manner the opening of further branches, and, if 
found advisable, to broaden the banking laws so as to permit the 
establishment of branches representing groups of banks. 

As commerce increases between the Americas, it may be found 
advisable to widen the powers of American banks and thus put them, 
as far as possible, in a position to compete successfully with foreign 
banks. 



GEOUP CONFERENCE REPORTS BRAZIL. 337 

Your committee is confident that the American branches will use 
their best endeavors to develop this local commercial business as 
rapidly as it can possibly be done; but it must, of course, be borne 
in mind that, at first, progress in the development of these banking 
relations must of necessity be slow until the managers of these 
branches familiarize themselves with local conditions. Banking of 
this nature depends entirely upon confidence based upon mutual 
acquaintance and each banking transaction, will require close study 
of the financial and commercial conditions underlying the propo- 
sition. 

Large results can only be achieved if business is built up in each 
case upon a safe foundation, and this can only be done where there 
is a spirit of mutual helpfulness and information concerning financial 
conditions is freely given. 

It must be remembered that local banks and the foreign banks 
now operating in Brazil have an extensive knowledge based on an 
experience obtained during a long period of years, and that the 
standing of would-be borrowers is well known to them. New banks 
entering the field should receive all possible assistance so that they 
may equip themselves in as short a period of time as possible for the 
doing of the necessary local business. The success of American 
branches, in so far as they shall be expected to participate in the 
purely local banking business of the country, will depend very 
largely upon that degree of cooperation which shall be accorded them 
by the people of Brazil. While American banks entering Brazil 
must realize that they will have to accommodate themselves to 
Brazilian usages and customs, it may also be said that the Brazilian 
business man will, to a certain extent, be obliged to consider Ameri- 
can customs. The fact must not be overlooked that branches of 
American national banks are restricted in their operations by the 
laws of the United States under which they are organized. These 
banks are under the supervision of American bank examiners and 
are obliged to observe certain rules as to the liquidity of their loans, 
as to the amounts which they are permitted to lend, and as to the 
character of the loans. There are certain loans, as, for example, real- 
estate loans, which a United States national bank is prohibited from 
dealing in. 

The Brazilian business man, it is hoped, will do what he can to 
make it possible for American banks to give real financial assistance 
within the restrictions under which these banks are obliged to operate. 
The Brazilian business man can help in several ways, particularly in 
not being overexacting with respect to the time for which credit is 
asked. In the development of the American banking system the 
principle has become fixed that loans should be reasonably liquid, and 
in the Federal reserve act the limit for loans made by the Federal 
reserve banks has been placed at 90 days for strictly commercial loans 
and 6 months for what might be termed loans for agricultural pur- 
poses. 

Another principle adopted by the Federal reserve banks and the 
member banks is that the condition of borrowers shall be made 
known with entire frankness to the bank. In the matter of loans 
in excess of certain amounts, the borrower in the United States is 
required to submit a statement of his condition, and in the United 
98257°— 15 22 



338 PAN AMEBIC AN" FINANCIAL CONFEBENCE, 

States this custom is generally complied with. It is felt that the 
stronger the financial standing of a merchant the less should be his 
objection to reporting to his banker the condition of his business. 
It can not be expected that branches of American banks will become 
factors of great importance or will be able to render valuable assist- 
ance locally unless the firms which desire to use their facilities and 
to request accommodations for their ends are willing to give the 
information necessary to permit of the doing of business in a safe 
manner. By freely establishing these credits American branches 
will facilitate in a large measure importation and exportation of 
goods between the two countries: 

TRADE AND COMMERCE. 

The Brazilian subcommittee on problems of transportation and 
commerce beg to submit the following recommendations to the 
general committee on Brazil : 

(1) We recommend that greater prominence be given in the public 
schools and other educational institutions of the United States to 
the study of the Central and South American countries, their geo- 
graphical location, natural resources, government, and language. 

(2) We recommend that emphasis be given to the necessity of 
greater liberality being exercised in the interpretation of customs 
regulations by the countries of North America, and Latin America 
especially, with respect to the free entrance or drawback of duty on 
travelers' samples or other samples introduced into the respective 
countries, solely for the purpose of promoting trade. 

(3) With respect to the necessity of more effective protection of 
trade-marks, we call attention to the efforts that have been made in 
previous years by conferences among several nations to protect the 
inviolability of trade-marks and to facilitate the granting of trade- 
marks, and recommend renewed consideration and joint agreement 
by special committees from each country on this subject. 

(4) To facilitate reciprocal business relations between merchants 
and manufacturers of both nations and the granting of such reason- 
able credits in both directions as may be safe and desirable, we recom- 
mend the establishment of a reliable means whereby merchants and 
manufacturers of either nation can determine with reasonable ac- 
curacy the financial responsibility of the purchaser of the other 
nation, and to this end the active and liberal cooperation of the bank- 
ing institutions of each nation is invited. 

(5) This subcommittee strongly recommends that there be estab- 
lished between the United States and Latin- American countries a 
system of direct exchange based on the dollar unit of the United 
States of North America. 

(6) In order to facilitate the interchange of products adapted to 
the needs of American countries we recommend the formation of 
bureaus of standards of the respective countries to standardize, in so 
far as possible, the requirements of each country, and recommend to 
the manufacturers and producers of the several countries the imme- 
diate recognition of such standards and corresponding weights and 
measures, and we urge that such steps be taken in the United States 



GROUP CONFERENCE REPORTS BRAZIL. 339 

as will insure the general adoption by it of the metric system of 
weights and measures within a reasonable term of years. 

(7) We draw attention to the favorable results which have fol- 
lowed the granting by Brazil and Cuba of preferential duties apply- 
ing to certain products of the United States and recommend the ex- 
tension of reciprocal tariff concessions between the Latin American 
countries and the United States. 

(8) We emphasize the extreme necessity for rapid, frequent, and 
dependable marine transportation service to provide adequately for 
the maintenance and development of commerce between the States of 
North and South America. 

(9) We recommend that the postal rates now existing within the 
United States be extended to include the Latin American countries 
and made reciprocal, and that it is of the very greatest commercial 
importance that a parcel-post and money-order system be generally 
established. 

(10) We urge the extension of direct telegraphic service, either wire- 
less or cable, between all parts of North, Central, and South America, 
to be owned, controlled, and operated by exclusively American in- 
terests. 

(11) We recommend to the press of all the interested countries 
that a more comprehensive and reliable system for the exchange of 
important news items be established. 

GENERAL SUGGESTIONS. 

The general committee also unanimously adopted the following 
recommendation : 

" Your committee feels that permanent results will flow from this 
great conference if specific efforts are made to carry on the work after 
the conference is ended. Success along this line can only come by a 
definite, organized effort and by keeping attention focused upon the 
particular problems which may arise in connection with the develop- 
ment of commercial relations between North, Central, and South 
America. 

"We feel that the establishment of a permanent expert body, 
upon which shall be represented as far as practicable all American 
Eepublics, is essential to the growth of commercial relations between 
the Americas. Such a body of experts should, we believe, closely 
cooperate with the Pan American Union ; it could devote its energies 
to a study of trade laws, customs regulations, business practices, finan- 
cial and commercial relations, with the purpose of developing a 
greater uniformity in laws and customs and of furnishing accurate 
and reliable information bearing upon financial and commercial 
problems. One of the main purposes of such an organization would 
be to furnish a source of reliable information which could be readily 
available to the business men of any of the countries. 



340 PAN AMERICAN FINANCIAL CONFERENCE. 

" Of most importance at the present time and in the immediate 
future is the mutual education of the business men of the Americas, 
not only in regard to business customs and trade laws, but also 
concerning the resources of the various countries, the problems in 
connection with their development, and the results which may be 
expected from capital conservatively invested. Information of this 
kind is particularly necessary in the United States. South and 
Central American Eepublics, which are at the present time looking 
to North America to furnish capital for the development of their 
countries, should be keenly interested in educating the investors of 
the United States as to the business possibilities and resources of 
their countries. A wide-spread knowledge of conditions and an 
understanding of the resources of countries are prerequisite to the 
successful attraction of capital. 

"It is important that the committee or commission should have 
a responsible permanent head with expert experience, the com- 
mittee itself to be composed of experts representing each of the 
countries. The expert representing each of the countries might 
himself very properly be the permanent chairman of a committee 
of business men to be appointed in each country to advise with the 
committee through their chairman." 

The committee therefore suggests and recommends the adoption 
of the foregoing recommendations by the Pan American Financial 
Conference. 

Respectfully submitted. 

Amaro Cavalcanti, Chairman. 



APPENDIX TO EEPOET OF COMMITTEE ON BKAZIL. 5 



Foreign Commerce of Brazil with the Nations Here Indicated, 
Quinquennium from 1910 to 1914. 

The values have been calculated upon foreign coins, taking as a basis the in- 
ternational parity of 112.10.0 equal to milreis 1.000 $000 (Brazilian money ac- 
count), also that of francs 25.22 equal to a pound sterling, and still francs 5.18 
equal to $1 (American coin). 

Imports and exports of four countries whose balance shows favorable to Brazil. 



United States 

Netherlands 

Austria-Hungary. 
France 



Imports. 



39, 814, 441=$191, 109, 316. 80 
2, 149, 466= 10, 317, 436. 80 
3,733,686= 17,921,692.80 

24,260,276= 116,449,324.80 



Exports. 



115, 974, 201= $556, 676, 164. 80 
20,889,652= 100,270,329.60 
13,243,242= 63,567,561.60 
29,695,627= 142,539,009.60 



Total i 69, 957, 869= 335, 797, 771. 20 179, 802, 723= 863, 053, 065. 60 109, 844, 854= 527, 255, 294. 40 



Balance. 



76, 159, 760=S365, 566, 848. 00 
18,740,186= 89,952,892.80 
9,509,556= 45,645,868.80 
5,435,351= 26,089,684.80 



i In favor of Brazil. 

What will explain such an enormous difference against the United States? 
In my opinion this question has been already answered by some publications 
made in the "United States, wherein facts and conditions are pointed out which 
state in a veritable way the trade situation at present existing between Brazil 
and the United States. 

Such facts and conditions are the following : 

(1) Business people of North America have in general but a very confused 
idea of trade and commerce in Brazil. 

(2) Even the great manufacturers, merchants, and exporters have not yet 
endeavored properly and earnestly to study and understand the financial and 
business methods likely to enlarge their relations with the customers and con- 
sumers they already have in Brazil, except in regard to some few articles, 
the most important of which is flour, which at present enjoys a reduction of 
30 per cent in all customhouses in Brazil. 

(3) Such ignorance in relation to the Brazilian trade and commerce is 
mainly due to lack of a more frequent communication of all kinds between the 
two countries, which is not true of the principal European countries, which have 
an increasing interest with the South American countries through their steam- 
ship lines touching continually the ports of Brazil. 

(4) The most of the North American manufacturers, merchants, or experts 
do not know, in a reliable manner, what are the common or most prevalent 
market prices of the European goods that are imported by the Brazilian mer- 



* Presented by Dr. Amaro Cavalcanti. 



341 



S42 PAN AMERICAN" FINANCIAL CONFERENCE. 

chants, In order to compare them with those of similar goods when manu- 
factured in North America. 

(5) They are ignorant, further, of what kinds of merchandise are being manu- 
factured to-day in Brazil, their quantity and their quality, and what price 
similar merchandise can obtain most commonly in the international markets. 

As to the particular advantages to come from the increase of steam navigatiou 
between the two countries, they are self-evident. It suffices to state that given 
the organization of a monthly line between Rio de Janeiro and New York by 
the Brazilian Lloyd, in spite of its being composed of a few small steamers, 
the exports of North America to Brazil has increased in an extraordinary way, 
as one can see from the following figures : 

Exports of North America to Brazil. 

1910— £6, 127, 582. 0.0 or $29, 412, 398. 60 

1911- — — 7,045,277.0.0 or 83,817,329.60 

1912 9,899,036.0.0 or 17,515,372.80 

1913 10, 553, 432. 0.0 or 50, 656, 473. 60 

1914 6, 189, 114. 0.0 or 29, 707, 747. 20 

Amounting to a total of £39, 814, 441. 0.0 or $191, 109, 316. 80 

Leaving out of account the year of 1914, it being an abnormal one, the 
Brazilian imports of North American goods during the preceding four years 
show an increase of about 42 per cent — a progress never before attained by any 
other country in an equal space of time. 

Now, it seems to me opportune to say a word on the intelligent way in 
which the Germans have developed their trade and commerce in Brazil during 
the same last five years : 

Imports from Germany. 

1910 - £7, 607, 898. 0.0 or $36, 516, 910. 40 

1911 8, 869, 911. 0.0 or 42, 575, 572. 80 

1912— 10, 909, 079. 0.0 or 52, 363, 536. 00 

1913 11, 737, 398. 0.0 or 56, 339, 510. 40 

1914 5,719,045. 0.0 or 27,451,416.00 

Amounting to a total of £44, 843, 331. 0.0 or $215, 246. 945. 60 

Exports to Germany. 

1910 £7,466,734. 0.0 or $35,840,323.20 

1911 9,702,501. 0.0 or 45,572,004.80 

1912 10,684,814. 0.0 or 51,287,107.20 

1913 9,134,240. 0.0 or 43,844,352.00 

1914 4,636,318. 0.0 or 22,254,326.40 

Amounting to a total of £41, 624, 607. 0.0 or $199, 798, 113. 60 

The balance in favor of Germany is scarcely £3,218,715, or $15,449,832, while 
the totality of all values, both imported and exported, reaches the total sum of 
£S0,467,929, or $415,046,050.20. Leaving out of consideration the abnormal year 
of 1914, the difference between the import value of £7,607,898, or $36,517,910.40, 
in 1910, and that of £11,737,398, or $56,339,510.40, in 1913, shows an increase of 
£4,129,500, or $19,821,600, or 35 per cent. 



GROUP CONFERENCE REPORTS BRAZIL. 348 

As to the Brazil exports from 1910 of £7,466,734, or $35,840,323.20, to 1913 of 
£9,134,240, or $43,844,352, its increase has been 30 per cent. 

The comparison of these figures on both sides " Imports and exports " serves 
to convince one of the beneficial and reciprocal advantages really produced by 
trade between Brazil and Germany in the period referred to. 

It is such a kind of - commercial equilibrium that we desire shall also exist 
through an extensive and growing intercourse between Brazil and the United 
States. But this German situation was not acquired in the Brazilian markets 
as a mere matter of chance ; not at all. 

The Germans have not attained it except by studying thoroughly the eco- 
nomic conditions of Brazil, by looking into its several branches of trade 
activity, by establishing German banks in its principal cities, by maintaining 
and increasing between their country and Brazil German lines of steam naviga- 
tion, by inquiring into the conditions of credit to be opened to Brazilian im- 
porters or merchants worthy of confidence, by examining carefully not only the 
reliable reasons for good returns from the manufactures exported but the 
same on the products to be imported either for food or as raw material for the 
factories, and finally by lending and investing German capital in favor of com- 
mercial transactions and agricultural and industrial enterprises between the 
two countries. 

If the German methods proved really efficient and favorable for the great 
development of trade between Brazil and Germany, why not adopt equal 
methods between Brazil and the United States? 

SOME SUGGESTIONS. 

Regarding the subject of relations in general between the North, Central, 
and South American countries, it seems to me to be an opportune time to offer 
the following suggestions : 

(a) It is necessary to put an end once for all to the misconception, if it 
exists anywhere, that 'the United States, by promoting the enlargement of 
its relations with the Central and South American Republics, aims but to 
increase a way of better patronizing them, pursuant to the principles of the 
Monroe doctrine. As to Brazil, in particular, such a misconception never 
existed. 

Whatever may be the interpretation freely given to the said doctrine, the 
truth is that on one side all of the Republics in South and Central America 
have entire self-consciousness of their political position as independent nations, 
knowing that they are sovereigns within their territories, as the great North 
American Republic is. On the other hand, it is absolutely certain to each that 
the United States has continually demonstrated that it has no other feeling 
or intention with reference to its sister Republics that those of mutual progress, 
development, and prosperity. The respect for each country's right and priv- 
ileges has been always the continued rule of its conduct toward such Re- 
publics. Therefore there is no reason whatever for them to admit so mischie- 
vous an insinuation, obviously disseminated with a view to diminishing and 
weakening their good will and sympathy with the United States. 

(6) It is likewise necessary to be settled that in the market of South America 
there is no exclusive preference toward the goods imported from Europe. The 
South American merchant will buy from the North American producer or manu- 
facturer as much or more than he does from the European, provided that the 
former offers him price, quality, and other conditions not inferior to those 
offered by the latter ; or, as it already has been observed, " it should not be 



344 PAN AMERICAN FINANCIAL CONFERENCE. 

imagined that the customer at the other end has any respect or sentiment for the 
national origin of the goods he is prepared to buy. The customer is the ordi- 
nary human being and struggles to get the best value for his money, with no 
care whether the article is of American or European make, so long as the price, 
quality, and style are suitable to him." Such is, and such shall ever be the 
predominant rule in business or trade affairs. 

Of course if we look upon the figures of the foreign trade — I speak on this 
point with particular reference to Brazil — we shall find a somewhat enormous 
balance against the United States in comparison with some European countries 
with which we maintain most frequent commercial relations, as, for example, 
while Brazil has imported, from 1910 to 1913, $335,340,153 from England and 
$215,247,945 from Germany, on the other hand the importations during the 
same period from the United States did not exceed $191,109,316. Also if we 
compare the figures of importation and exportation, say, between England or 
Germany and Brazil, we shall still find a balance in favor of the former of 
$101,056,756 and $15,449,832, respectively, while similar figures between Brazil 
and the United States show a new difference against the latter of $365,566,848. 

But it is now. to be observed that such difference unfavorable to the United 
States does not mean in any way a lack of good will toward this country. 
The fact is merely due to some special circumstances, the principal of which 
may be briefly stated as follows : First, the priority of the Europeans in South 
America, steadily increasing by the establishment of commercial houses, banks, 
and industrial enterprises of various kinds in different parts of the countries 
concerned; and, second, and above all, by the increasing investment of Euro- 
pean capital there. 

If the North American producers, merchants, manufacturers, and capitalists 
are willing to act in the same way and to an equal extent, and being guided by 
the same spirit, purpose, and belief, there can not be any doubt that they will 
get a large field for business, securing equal or more profitable returns. 

Moreover, there are yet some conditions of detail that the business men 
of North America leave out of consideration, and this undoubtedly to their 
disadvantage. Although it is true that the South American markets have been 
visited in the last few years by North American travelers, manufacturers, 
merchants, and capitalists, or their agents, yet the fact remains that they do 
not have enough reliable information as to the said markets. I should say, re- 
garding the goods and under what conditions they would be better accepted by 
the customers and consumers in the different countries, sometimes one deals 
with a question of the size, form, color, or style of the article, and ev r en of its 
packing, as already used or preferred, which will decide their general accept- 
ance in the market. In this particular no foreign merchant or manufacturer 
has proved better disposed to any arrangement than the German exporter, for 
what he wants is to get a market for his goods, whatever may be the conditions 
required by the importers or consumers. This explains the high figures the 
German commerce has reached everywhere in South America. 

(c) The question of credit is a fundamental one for business relations with 
South American merchants. As to Brazil, for example, it is important to keep 
in mind that the great importers in the markets of Para, Pernambuco, Bahia, 
Rio de Janeiro, Santos, Rio Grande do Sul,, and the other centers of Brazil, 
reputable men and well regarded as they are generally, have been accustomed 
to enjoy all facilities of credit, purchasing, as a rule, the goods imported on 
terms of 60, 90, 120 days, and even of 6 months. It will be unnecessary to 
mention that the American exporters do not sell their goods under those condi- 
tions, sending their goods to the customers only for advanced payment. 



GROUP CONFERENCE REPORTS BRAZIL. 



345 



(d) It is still desirable to insist on the need of American steamship com- 
panies and American banks in South America as a means of improving and 
increasing the commercial relations between the countries there and North 
America. The steamship lines are needed for the prompter transportation 
of people and goods, and the banks for facilitating all the pecuniary transac- 
tions. 

So far as concerns Brazil, it can be asserted that the two now existing steam- 
ship lines, one Brazilian and the other English, are not likely to meet all the 
requirements of an increasing movement of first-class passengers and of a more 
rapid postal service, as would be desirable. 

With regard to the lack of American banks in the South American commer- 
cial centers, all we know is that last April two agencies of the National City 
Bank of New York, one in Rio de Janeiro and the other in Santos, began to 
operate, but under such limited circumstances that as yet they do not fulfill the 
ends had in view. It would be at least desirable that other similar agencies 
should be established as early as possible in the other principal cities of the 
country. 



A 



PARTIAL LIST OF GOODS IMPORTED DURING THE LAST FIVE YEARS. 





Imports from all coun- 
tries. 


Imports from the 
United States. 




In contos. 


In pounds 
sterling. 


In contos. 


In pounds 
sterling. 


Scales 


1,840 

68, 195 

155,325 

8,462 

20,293 
4,835 
9,321 
6,820 
1,579 
2,581 

11, 124 

10,455 
1,647 


122,666 

4, 546, 333 

10,421,666 

564, 133 

1,352,866 

322,333 

621,333 

454,666 

105,266 

172,066 

741, 600 

697,000 

109, 860 


795 

4,555 

59,720 

231 

442 

4,040 

1,260 

1,871 

230 

704 

1,904 

1,664 

186 


53,000 

303,666 

3,981,333 

15,400 

29,466 
269,333 

84,000 
124,732 

15,333 

46,933 
126,933 
110,933 

12,400 


Cement 


Flour 




Condensed milk 


Writing machines 


Pianos 


Timepieces 


pTintinp-irrk:. 


Varnishes 


Rubber manufactures 


Furniture 


Windmills 




Total 


302,277 
60,695 


20,231,728 
4,046,345 


77,602 
15,520 


5,173,462 
1,034,692 







Note. — The rate of 16d. for 1S000, or 1 pound sterling, 15S000, was taken for the conversion, as it was the 
exchange rate at the time referred to. 



346 



PAN AMERICAN FINANCIAL CONFERENCE. 
Population and surface. 



Amazonas 

Para 

Maranhao 

Piauhy 

Ceara 

Rio Grande do Norte 

Parahyba 

Pernambuco 

Alagoas 

Sergipe 

Bahia 

Esperito Santo...... 

Rio de Janeiro 

Sao Paulo 

Parana. 

Santa Catharina 

R : oGrande do Sul. . . 

MinasGeraes 

Goyaz 

Matto Grosso 

DistrictoFed 

Acre 

Total 



Inhabit- 
ants. 



500,000 
760, 000 
600,000 
450, 000 

1,000,000 
480,000 
650,000 

1, 650, 000 
800, 000 
500,000 

2,560,000 
430,000 

1,250,000 

3,200,000 
570,000 
510,000 

1,750,000 

4,850,000 
302,996 
300,223 

1,000,000 
195,000 



Square 
kilometers. 



1,894,724 

1,149,512 

459,884 

301, 797 

104,250 

57, 485 

74,731 

128,395 

58,491 

39,090 

426, 427 

44,839 

68,982 

290,876 

251,904 

43, 535 

236,553 

547,855 

747,311 

1,378,783 

1,116 

191, 000 



24,308,219 



8,497,540 



Square 
miles. 



731,553 

443,827 

177,561 

116,523 

40,250 

22, 194 

28,853 

49,573 

22,583 

15.092 

164', 643 

17,312 

26, 633 

112,307 

97,260 

16,808 

91,333 

211,540 

288,537 

532,348 

431 

73,745 



3,280,906 



Density of population. 



Per square 
kilometer. 



0.3 

.7 

1.3 

1.5 

10.0 

8.0 

9.0 

12.9 

13.7 

12.8 

6.0 

9.6 

18.1 

11.0 

2.3 

11.7 

7.4 

8.8 

.4 

.2 

897.5 

1.0 



Per square 
miie. 



0.7 

1.8 

3.3 

3.8 

25.9 

20.7 

23.3 

33.4 

35.4 

33.1 

15.5 

24.8 

46.8 

28.5 

5.9 

30.3 

19.1 

22.8 

1.0 

.5 

2,319.5 

2.6 



According to the last census, the Brazilian population exceeds 
25,000,000 inhabitants, evidently too small for such a large territory. 



CHILE 



347 



CHILE. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference, 
Sir : In behalf of the Chile Group Committee, we beg to say that 
after several well- attended conferences and after full discussion it 
was agreed to submit the following report to the Pan American 
Financial Conference: 

I. 

The question of facilities in transportation being referred to a spe- 
cial commission, the matter of financial facilities between the United 
States and the South American countries is, in the opinion of the 
Chilean committee, the next most important element in promoting 
closer commercial relations. For this purpose, in the judgment of 
the committee, it is desirable to encourage connections and inter- 
course between the established financial institutions of the South 
American countries and those of the United States, so that each may 
avail itself of the acquired experience of the others. Such relations 
will be beneficial in proportion to their expansion, and it is there- 
fore essential that the banks there and here should be qualified to 
draw bills of exchange upon each other in the same way as is now 
done between Europe and Chile, and the Chilean committee suggests 
that the Pan American Financial Conference shall recommend the 
adoption in both countries of certain necessary legislation tending to 
this end. 

II. 

With the same purpose, the Chilean committee suggests that the 
conference recommends that laws be enacted, in the countries where 
such legislation is not now in force, to legally establish bonded ware- 
house warrants and receipts, so as to make available collateral secu- 
rity for the development of international commerce. 

III. 

The Chilean committee suggests that the conference recommends 
the advisability of permitting the payment of such part of the export 

349 



350 PAN AMERICAN" FINANCIAL CONFERENCE. 

duties on nitrate from Chile to the United States of America, as are 
now payable in 90-day sight drafts in sterling on London, may 
hereafter be paid in 90-day sight drafts in dollars on New York, 
at such rate of exchange as may be periodically fixed by the proper 
Chilean authorities. 

IV. 

The merchants in Chile are accustomed to credits sufficiently long 
to enable them to realize upon their goods and thus procure funds 
with which to meet their obligations, while exporters in the United 
States of America demand generally cash payments for their com- 
modities. It is desirable that such necessary changes in the laws of 
the United States of America shall be made as will enable banks 
to extend their credit, discount, and rediscount facilities, so as to 
conform to the trade customs and necessities of Latin America. 



This committee has represented to the committee on uniformity 
of laws its belief that it is desirable to establish a permanent inter- 
American commission, which shall study commercial problems and 
conditions in the various countries, and particularly the customs 
laws and regulations now in force, and shall recommend a basis for 
making effective a uniform classification of goods for customs pur- 
poses and uniformity of port duties and regulations. 

A memorandum was prepared by the Chilean members of the com- 
mittee, in response to the questions suggested by the Secretary of 
the Treasury of the United States, regarding financial and economic 
conditions in Chile. 

Eespectfully submitted. 

Luis Izquierdo, Chairman. 



COLOMBIA 



351 



COLOMBIA, 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir: Your committee has discussed the various points raised by 
the Secretary of the Treasury for the consideration of the group 
committees with especial reference to the relations between Colombia 
and the United States. The Colombian delegates have submitted 
to the Pan American Financial Conference three comprehensive 
pamphlets dealing with the financial and economic situation of 
Colombia at the present time, reporting upon Colombia's public 
works and giving statistics of her trade. We beg to suggest that in 
the printed proceedings of this Conference these reports be included 
as a part of the report of this committee.* 

Our discussions have developed the fact that Colombia has in 
the past depended principally upon European credit for financing 
her foreign trade. Therefore when the declaration of war in August 
last was followed by the temporary interruption or cessation of these 
credit facilities, by the demands for the repayment of loans and by 
the declaration of moratoria in Europe and in certain countries of 
South America, although not in Colombia, there was not unnatu- 
rally considerable dislocation of the ordinary course of trade. The 
financial and economic situation of Colombia, while subjected to a 
severe strain, has remained fundamentally sound. 

As is shown by the statistics included in the accompanying memo- 
randa, Colombia has, for some time past, exported to the United 
States products valued at an amount nearly twice that of the com- 
modities imported from this country. Your committee therefore 
feels that it should be possible and is important more nearly to 
equalize the imports and exports between Colombia and the United 
States. Your committee moreover feels that, in order to effect this trade 
extension, the creation of mutual banking relationships, through 
the establishment in Colombia of branches of American banks or 

* See Exhibits A, B, and C immediately following this report. 
98257°— 15 23 353 



354 . PAN AMERICAN FINANCIAL CONFERENCE. 

through closer relationships between the institutions now existing — 
in Colombia and the United States — is highly desirable. Either 
one or the other of these steps must be precedent to and it is believed 
would naturally tend to the establishment of "dollar exchange," 
provided, of course, a market therefor could be created in Colombia 
itself. The creation of such a market would chiefly depend upon 
the increase of American exports to Colombia and the consequent 
remuneration due from Colombia to the United States. Your com- 
mittee feels, however, that the most essential step toward the stimu- 
lation of a market for " dollar exchange " is the investment of 
American capital in Colombian enterprises. 

Aside from the mutual advantages to be derived from the exten- 
sion of the commercial relations between the two countries, your 
committee desires to call the especial attention of the Conference, 
and particularly of the American delegates present, to the geo- 
graphical location of the Republic of Colombia in its relation to 
the Panama Canal and the proximity of the principal Colombian 
ports on the Atlantic and Pacific Oceans to both entrances of the 
canal. This being visualized it is at once self-evident that the 
hostage to the future given by the United States by the construc- 
tion of the canal makes it imperative in the mutual interests both 
of the United States and of Colombia that the two countries should 
establish relations of the greatest intimacy. 

Your committee moreover believes it to be in the interest of all 
the American Republics, whose future commerce will pass through 
the Panama Canal, and especially essential to the United States, 
that adequate harbor accommodations and facilities for transship- 
ment and storage be installed at the Colombian ports of Santa Marta 
and Cartagena on the Atlantic and Buenaventura on the Pacific 
Oceans. To assure the proper development of these ports it is also 
felt that the sanitation systems at these ports should be perfected. 
Specific Colombian revenues have already been assigned for the 
improvement of these harbors and the sanitation of these ports, and 
plans and surveys have been prepared by competent engineers. In 
addition, the especial attention of the conference is called to the 
possibilities of railway constructions which would stimulate the 
development of the rich, natural resources of the country, and thus 
build up a traffic which would find its way to the markets of the 
world through the ports mentioned. 

Your committee recognizes the importance of the extension of 
inter- American steamship transportation, but desires to make no spe- 
cial recommendation in this regard, feeling that the interests of 
Colombia in this respect will best be assured by common measures 
beneficial to all, which your committee understands are now being 
considered by a committee especially appointed for this purpose. 



GROUP CONFERENCE REPORTS COLOMBIA. 355 

Your committee is familiar with and indorses recommendations 
which will be presented by the general committee appointed to con- 
sider the possibility of securing uniform laws relating to trade, 
commerce, and an international commercial court. 

In conclusion your committee begs to report that from the stand- 
point of Colombia the most urgent requirement of the present time 
is capital with which to undertake the public improvements men- 
tioned above and to develop a system of national railways. This 
requirement, it is believed, Colombia shares alike with other coun- 
tries of Central and South America. In view of the present situ- 
tion throughout the world's financial markets, Colombia looks to the 
United States in the hope that American investors may find it profit- 
able to furnish the funds necessary for Colombian development, 
which development, it is believed, will be in the interest not only of 
Colombia itself but to the United States as well. With this object 
in view, your committee desires to submit for the consideration of 
the conference the following resolution: 

That in order to make definite and permanent the work of this 
congress, and that the greatest good may come from it, we make the 
following recommendations : 

1. That special committees for each country, similar to those which 
have been appointed in connection with this conference, be named by 
the Secretary of the Treasury and made permanent. 

2. That similar committees be appointed by the Pan American 
countries. 

3. That it shall be the duties of these committees to cooperate in 
the interchange of information, to study the financial and commercial 
problems of the respective countries, and to further in all practical 
ways the extension of mutual financial and commercial relations, 
making reports from time to time with reference to projects thus 
considered. 

4. That such reports be submitted to the Secretary of the Treasury 
and to the Chamber of Commerce of the United States, to be given 
such publicity as may be deemed advisable. 

5. That the Secretary of the Treasury be requested to consider the 
establishment of a general executive council, consisting of the chair- 
men of the various committees thus constituted in the United States; 
this council to meet at least once a year in Washington and to devise 
ways and means of continuing and enlarging the admirable work 
which has been begun by this conference. 

6. That consideration be given to the creation of a board of en- 
gineers, to be approved by the general executive council or by the 
Chamber of Commerce of the United States, from which board the 
several committees may select experts for the investigation of proj- 
ects to be offered for financing, the cost of such reports to be borne by 
the parties presenting the projects. 

Eespectfully submitted. 

S. Perez Triana, Chairman. 



EXHIBIT A. 

Colombia's Public Works — An Exceptional Opportunity for In- 
vestment or American Capital. 

Facts which Serve as a Basis for the Founding oe a Corporation 
or a Syndicate for the Development of Business and Public 
Works in Columbia. 

the country. 

Colombia is larger than Germany and France together ; also larger 
than all the coast States from Maine to Florida, including Ohio and 
West Virginia. 

Colombia is the richest and most powerful neighbor of the Panama 
Canal and has 1,600 miles of coast line along the Atlantic side and 
1,500 miles along the Pacific, with ports on both sides which serve 
as shelter for the vessels of all nations. 

Colombia, when assisted by large capital well employed, will be 
as rich as the richest and most prosperous country in Latin America, 
due to her boundless natural resources at only six days' distance 
from the United States. 

If American capital should go to Colombia at the present time 
it would have the first opportunity and could take advantage of the 
greatest and best classes of business and also obtain the contracts 
for the construction of the most indispensable public improvements 
of the country, exactly as the English did in the Argentine from 
1860 to 1880. 

PROSPECTIVE BUSINESS. 

Certain specific classes of business have an immense and very 
immediate future in Colombia, namely, mining, stock raising, and 
the exploitation of forests. 

MINING. 

All the minerals known are found in Colombia; and there are 
some, as platinum and emeralds, which are not found in any other 
country in paying quantities except Eussia. 

In the order of their importance, the workable mines are as 
follows : 

First. Gold, silver, platinum, iron, copper, and emeralds. 

Second. Crude oil. 

Third. Coal. 
356 



GROUP CONFERENCE REPORTS COLOMBIA. 357 

Up to the present time the exploitation of the above mineral prod- 
ucts has been made with small capital, which, however, has not pre- 
vented the making of large fortunes. 

So far the number of known mines in the Republic of Colombia is 
as follows: 

Department of Antioquia 12,181 

Department of Narino 2, 452 

Department of Caldas 2,610 

Department of Tolima 502 

Department of El Valle 641 

In regard to coal, Colombia need not import coal for her own con- 
sumption, for it is to be had in every part of the Republic. The 
exploitation has been limited to the needs of home consumption, but 
if carried out on a large scale the entire needs of the neighboring 
countries could be supplied, establishing large depots on both sides 
of the Panama Canal, at each port on the Atlantic and also on the 
Pacific side. 

Petroleum is found in large fields both in the interior and near the 
coast, and surveys made by individuals and by foreign syndicates 
show that Colombia may possibly prove to be a more productive field 
than Mexico. 

This mineral is to-day exploited on a very small scale. 

STOCK RAISING. 

Colombia has vast stretches of natural pasturage in all climates, 
ample for the feeding of stock on a scale sufficient to maintain a con- 
stant supply of cattle on the hoof, as well as for the establishment of 
packing houses in regions close to the coast. 

Nearer to the United States than Argentina and Uruguay, with 
her cheap cattle and grazing lands and with a large, substantial 
saving in freights, Colombia could send meat to the United States, 
as well as cattle, beating all competition. From the Atlantic coast 
seaports the distance is only 1,900 miles to New York and 1,400 miles 
to New Orleans. 

At present Colombia has only about 7,000,000 of bovine cattle, 
and yet only 7,000 head were exported last year to Panama and 
the West Indies. Should a packing house be established, the scope 
of the exports would be easily increased 50 times. 



There are all kinds of woods for fine cabinetwork, such as ma- 
hogany, cedar, walnut, etc., as well as enormous tracts of lands cov- 
ered with famous hardwood like lignum-vitse, quebracho, diomate, 



358 PAN AMERICAN FINANCIAL CONFERENCE. 

etc. ; also a rich collection of trees and shrubs for the production of 
tannic acid ; the mangrove in particular. 

These large forests are generally found along the banks or near 
by the rivers of easy navigation. 

It is evident, therefore, that there is a field for the profitable in- 
vestment of all the capital that may be desired for the development 
of these great natural resources of the country. From the lack of 
capital there follows a lack of belief in the country, simply because it 
is not explored, and therefore not known. 

A GEEAT NATION WITHIN COLOMBIA. 

In the foregoing no account has been given of eastern Colombia, 
that is to say, of those immense plains traversed by long, navigable 
rivers which empty into the Orinoco and the Amazon. 

These lands are as a rule level and covered with natural pasturage, 
where abound droves of cattle, partly domesticated and partly wild, 
whose exact number is not even known. It contains also abundant 
quantities of petroleum, which can be seen running out over the sur- 
face of the rivers. It is rich in gold, for there was located the El 
Dorado of the conquerors. 

A large colonization enterprise, obtaining from the Government 
extensive territory and with such grants as the famous English com- 
panies possessed in colonizing Africa, could transform such territory 
into inexhaustible storehouses of natural products and into marts of 
the grazing and mineral industries. That region of the future has 
two outlets — to Europe, by way of the Amazon and Orinoco Eivers, 
and to the Pacific, by means of a railroad easy of construction, which, 
taking advantage of a depression on the mountain range, can reach 
the valley of the Patia Eiver, which empties into the Pacific, a two 
days' journey from the Panama Canal. 

The interest of an American enterprise would favor the outlet by 
railroad along the Patia. 

MEANS TO SUCCESS. 

In order that the dormant riches of Colombia may be exploited and 
fill with money the coffers of those who will exploit them, it will be 
necessary to construct routes of rapid and cheap communication, 
build railroads, channel out certain rivers, and widen and improve 
maritime ports. This work is easy and has the advantage that, what- 
ever road or route be started, it will at once commence to pay returns, 
as the regions traversed are both populated and industrial. 

The greater part of the system of routes of transportation in 
Colombia has for its center the Eiver Magdalena, which is for Colom- 
bia what the Mississippi is for the United States. This river is navi- 



GROUP CONFERENCE REPORTS COLOMBIA. 359 

gable by large vessels for 600 miles up from its mouth, and for 
smaller craft 300 miles farther. Up this river foreign products and 
merchandise enter Colombia, and the greater part of the national 
products leave Colombia by the same river, as the centers of con- 
sumption and of production are located within a short distance on 
either side of the river. So that, taking the Magdalena River as the 
trunk line of the future systems, and channeling the sand banks at 
its mouth, in order that steamships may enter as far as the flourish- 
ing city of Barranquilla, it would be necessary to construct or finish 
or enlarge the following lateral railroads : 

1. From Calamar to Cartagena. 

2. From Tenerif e to Santa Marta. 

3. From Tamalameque to Cucuta. 

4. From Puerto Wilches to Bogota. 

5. From Puerto Berrio to Medellin. 

6. From Girardot to Cali. 

All of them should be feeders of a main railroad running parallel 
with the Magdalena from Neiva to Barranquilla. 

There is in such projects work for some 2,300 miles of new con- 
struction and of enlargement of the constructions already in existence. 

And apart from the Magdalena system, there remain to be con- 
structed other routes through rich mineral and grazing lands, as, for 
example : 

7. From Medellin to Puerto Cesar (Uraba) . 

8. From Medellin to Cali. 

9. From Bogota to the Meta (region of the east). 

10. From the Patia toward the great plains of the Amazon, or 
a total of 1,200 miles, more or less. 

The amount of American capital which it will be possible to em- 
ploy, figuring on the average rate of $50,000 per mile, will reach 
some $200,000,000, and with the improvements of the sea and river 
ports and the dredging of rivers this figure may go up to $250,000,- 
000, a vast and highly productive investment for the genius and 
energy of this Nation, and yet an amount less than that which has 
been invested by the English in Argentina. 

And it should not be forgotten that the Colombian law authorizes 
the Government to subsidize railroad construction to the extent of 
$10,000 per kilometer of roadbed constructed ($16,000 per mile), 
and it grants up to 300 hectares of public lands per mile of railroad 
constructed, to be located on either side of the same. 

The law grants to the construction companies (of railroads) the 
privilege of usufruct of the railroad up to 50 years, after the expira- 
tion of which period it can be continued for 25 years more, but the 
Government may during the last period buy the railroad from the 
concessionaires. 



360 PAN AMERICAN FINANCIAL CONFERENCE. 

MODUS OPERANDI. 

We recommend the organizing of an association of bankers, manu- 
facturers, construction companies, railroad and mineral industries 
which will decide to invest a sum of money in the immediate explora- 
tion of the country and in obtaining contracts of colonization, con- 
struction, exploitation, etc. 

This amount of money, or common fund, might be managed by* a 
syndicate, to be represented later by shares of stock (paid up) in the 
different companies which may be formed. 



EXHIBIT B. 



Public and Private Financial and Economic Situation of 

Colombia. 

Before the outbreak of the European war the economic increment 
of Colombia followed a normal progressive course, and faith in her 
future growth had encouraged some European syndicates and capi- 
talists to submit to the Government different schemes dealing with 
the material and financial development of the nation. As to banking, 
for instance, the house of Dreyfus, of Paris and London, submitted 
to the Government two plans to establish a central bank for deposits 
and discounts, with the right of issuing bank notes, and with a capital 
of $5,000,000; also a mortgage bank with a capital of $5,000,000. 
The terms under which these two banks were to start business were 
widely discussed, and the bankers, after considering the principal 
objections made to the original proposal, changed those terms for 
others more favorable to the Government. The projects so modified 
should form the basis for the bills that were to be submitted to the 
July sessions of Congress in 1914. But the European war put a stop 
to all these plans. 

As regards public works the Colombian Government entered into 
contracts with English corporations for the survey of the principal 
ports on the Pacific as well as on the Atlantic Ocean, in order to 
methodically enlarge and equip them. 

Surveys were made for works to cost a total of £3,000,000 to 
£4,000,000, and a contract was even signed for works to cost $3,000,000 
in one of the ports. The European war, however, left those contracts 
in abeyance. 

Encouraged by the studies of the subsoil of Colombia, which had 
clearly shown the oil wealth of the country, Pearsons, the English 
syndicate, sent representatives to Bogota to submit to the Govern- 
ment the exploitation on a large scale of the oil fields that might be 



GROUP CONFERENCE REPORTS COLOMBIA. 361 

found in Government lands. The tenders submitted were carefully 
considered, but the syndicate withdrew them because they found that 
the press was strongly opposed to the contracts. Other American and 
Canadian syndicates had also decided to work the extensive oil fields 
of Colombia, and probably they have followed up their studies and 
surveys. 

In order to take advantage of the experience acquired in other 
countries, the Colombian Congress passed a bill by which it was de- 
clared that the subsoil of the public lands where oil is found is the 
property of the nation and can not be assigned in perpetuity to any 
company or individual which might wish to work the same. The 
future exploitation of public oil fields in Government lands will, 
therefore, be acquired by concessions limited to a term of, say, 20, 30, 
or 50 years. 

Some time in 1913 several European construction companies, 
backed up by French, English, and German banks, planned to submit 
to the Government the construction of all the railway lines in pros- 
pect, furnishing the necessary capital, as well as European engineers 
and the equipment required, in order to work and manage the lines 
until the time when the Government should decide to buy them, on 
conditions to be agreed upon. The Balkan War prevented the syndi- 
cate from going ahead with the plan ; then the European war broke 
out and it was found impossible to renew it. 

It is then safe to state that (1) foreign capital was ready to go 
into Colombia, as the country was found to be a promising field, and 
(2) that had it not been for the European war the country would at 
present be in a way to speedy progress and with strong national and 
foreign banking institutions working under the laws of the country. 

The field thus prepared is the same which the force of circum- 
stances places to-day within the reach of American capitalists, either 
as individuals or as financial corporations. The Colombian Govern- 
ment is ready to render every aid to any reliable corporation that may 
wish to undertake the economical development of the country. 

Among the public works referred to the most important is rail- 
way communication, in which $200,000,000 could be easily and profit- 
ably invested. 

Since 1910 the fiscal standing of the country has steadily progressed 
and the National Treasury revenues have increased, as shown by the 
following figures: In 1910, $10,983,000; in 1911, $11,531,000; in 1912, 
$13,218,000; and in 1913, $17,055,000; and the outcome of the first 
six months of 1914 warranted the belief that the revenues for that 
year would reach $19,000,000 or perhaps $20,000,000. 

Belying on the normal development of the country the Govern- 
ment had decided on a plan of improvement by public works, to be 



362 PAN AMERICAN" FINANCIAL CONFERENCE. 

carried out with the ordinary revenue, and in consequence laws were 
enacted by Congress providing for the dredging of the Magdalena 
Eiver (law 71 of 1914) , for the encouragement of navigation on the 
Pacific Ocean (law 75 of 1914), to build a railway between the city 
of Cucuta and the Magdalena Eiver (law 89 of 1912) , besides other 
laws which provide for school buildings, for public buildings, and 
for cart roads all over the country. 

But the largest resources of the Government come from the custom- 
houses, which yield about 75 per cent of the total yearly revenues. 
Customs duties are only charged on foreign merchandise and com- 
modities, since the export tax on the two or three Colombian products 
liable to duty is so small that it can not be taken into account. 

When the European war broke out trade with Germany practically 
came to an end, and commerce with England and France was greatly 
limited; consequently the national revenues decreased and have con- 
tinued to do so, to the point that the Government felt compelled to 
pass two decrees in order to cut down expenses. These decrees were : 
October 20, 1914, for $2,257,000 for the year 1914, and February 6, 
1915, for $3,575,000 for the year 1915. 

This way of meeting the deficit was considered more practical and 
found to be more advantageous than the use of credit by loans in 
order to fill up the deficiency, notwithstanding it would have been 
comparatively easy to obtain loans to meet the usual expenses of 
administration. 

FOREIGN DEBT. 



The foreign debt of Colombia for loans as well as for subventions 

and guaranties of interest on railways, which is insignificant, is to be 

paid in London and is made up of the following items : 

Three per cent consolidated debt £2, 174, 600 

Sabana Railway 5 per cent loan 2S9, 400 

1911 6 per cent loan 292, 400 

Six per cent Girardot Railway bonds to cancel several 
debentures 1, 167, 132 

Total £3, 923, 720 

or $19,618,600, which is an average of $3.60 per capita, certainly one 
of the lowest in American countries. Should Colombia ever decide 
to use her credit in order to obtain loans for public works or to en- 
courage immigration or to build schools, she would have her credit 
as a considerable asset to draw upon without having to make use of 
her vitality. A proportion of $25 per capita on 5,500,000 inhabitants 
would allow Colombia to have a public debt of $140,000,000, which 
she could easily take care of. As it is, Colombia's debt is only 
$20,000,000. 



GROUP CONFERENCE REPORTS — COLOMBIA. 363 

MONEY IN CIRCULATION, AND CURRENCY. 

Law 69 of 1909 gave the control of currency in Colombia to a board 
made up of three independent persons, called Junta de Conversion or 
converting board. This board is in charge of the circulating cur- 
rency, as well as of the change of damaged bank notes or paper 
money. Its paramount duty is to collect a conversion fund in gold 
coin with which to guarantee the paper money in circulation. This 
fund of guarantee is made up of an additional 2 per cent on all cus- 
toms duties, of the produce of the emerald mines, which are the 
propert} r of the nation, and of sundry other subsidiary resources. 

The money in circulation in Colombia is estimated to be $24,000,000 
to $25,000,000, which amounts to $4.30 to $4.60 per capita, a very 
small proportion, indeed, and which will naturally increase when 
Colombia succeeds in turning into coin the entire national produc- 
tion of her gold mines, rather small at present, since it is only 
$5,000,000 yearly, but which will necessarily increase tenfold or more 
when the mineral resources of the country are properly worked, 
which can not be done at present on account of lack of communi- 
cation. 

The amount of money in circulation in Colombia is made up of 
the following items: 

Paper money (value in gold) $10,056,300 

Silver coin 0.900 fine 4, 004, 700 

Nickel : 997, 700 

Colombian gold coin 85, 000 

English and American gold coin 6,356,300 



$21, 500. 000 
It is estimated that there are also in old silver coins, 

Colombian and foreign, in the frontier Departments. 3, 000, 000 



Total $24, 500, 000 

The gold coin now on deposit to guarantee the paper • 
money in circulation amounts to $2, 586, 400 

There is also a stock of emeralds now in Europe be- 
longing to the Government which, turned into cash, 
would add 2, 663, 600 

Total, approximate $5,250,000 

which is about 50 per cent of the gold value of the paper money. 

The converting board has entered into a contract with the Ameri- 
can Bank Note Co. by which the latter is to engrave notes repre- 
sentative of gold coin of the value of $1, $2, $5, and $10. These 
notes are to be given in exchange for all now in circulation which 
are not uniform in size, color, etc. 



364 PAN" AMERICAN FINANCIAL CONFERENCE. 

MONETARY UNIT. 

The monetary unit in Colombia is the gold dollar, equivalent to 
exactly one-fifth of £1. It weighs 1 gram 597 T % milligrams, and is 
sterling fine. The multiples of the gold dollar are one-half condor, 
which equals £1 or $5 ; the condor, which equals £2 or $10 ; and the 
double condor, which equals £4 or $20. 

The silver coins are 0.900 fine, and are coined in fifty, twenty, and 
ten cent pieces. 

The nickel coins represent a value of one, two, and five cents. 

The English pound sterling has a legal circulation as if it were 
national currency. 

BANKING. 

The banks doing business in Bogota, the capital of Colombia, have 
a total capital of $4,350,000, sufficient some years ago but inadequate 
at present, in view of the increase of business. These banks are 
careful to excess in the management of their business; so much so 
that at the end of 1914 some of them had in cash and liquid assets 
in their vaults and abroad sufficient means to exchange 63 per cent 
(Banco de Bogota) and 80 per cent (Banco Hipotecario) of their 
deposits and current accounts. 

The profits in the last six months of 1914 in relation to the 
capital of the banks were: 

Banco de Colombia, 7£ per cent in six months. 

Banco de Bogota, 13 per cent in six months. 

Banco Hipotecario, 12 per cent in six months on $500,000 paid up. 

Banco Central, 3J per cent in six months. 

The law does not allow banking institutions to issue notes, and the 
Government has the exclusive right of granting this concession to one 
or more banks, according to the security offered by them; but this 
right has not yet been granted. 

In the proposal submitted by Dreyfus to the Colombian Govern- 
ment in 1913 for establishing a central bank with a capital of 
$5,000,000, it was stipulated that the bank may issue notes as cur- 
rency to an amount three times its capital. Should a proposition of 
that sort be ever agreed upon, there is no doubt that the Government 
would grant that most important privilege. 

Lack of time has prevented the Colombian delegates from obtain- 
ing data from banks in other towns of Colombia. The data regard- 
ing the banks at Bogota on December 31, 1914, are as follows: 



GROUP CONFERENCE REPORTS COLOMBIA. 365 

BANCO DE COLOMBIA. 

Capital $780, 000 

Reserve fund $32, 750 

Deposits and current accounts, gold and paper money 

reduced to gold $2,638,000 

Profits in 1914 (six months) $55,670 

Cash on hand for balance of current account if de- 
manded per cent__ 52 

Mortgage certificates $442, 000 

BANCO DE BOGOTA. 

Capital $250, 000 

Reserve fund $100, 000 

Deposits and current accounts, gold and paper money 

reduced to gold $1, 520, 018 

Profits in 1914 (six months) $32,500 

Cash on hand for balance of current account if de- 
manded per cent— 63 

Mortgage certificates , None. 

BANCO CENTRAL. 

Capital $2,300,000 - 

Reserve fund $343, 000 

Deposits and current accounts, gold and paper money 
reduced to gold $706,000 

Profits in 1914 (six months) $79, 600 

Cash on hand for balance of current account if de- 
manded 

Mortgage certificates $1, 040, 000 

BANCO HIPOTECARIO. 

Capital l * $1, 000, 000 

Reserve fund $49,100 

Deposits and current accounts, gold and paper money 

reduced to gold $393, 600 

Profits in 1914 (six months) $60,200 

Cash on hand for balance of current account if de- 
manded per cent 80 

Mortgage certificates $943, 000 

PEIVATE ENTERPRISES. 

The condition of private enterprises and of trade in general before 
the outbreak of the European war was very satisfactory and was 
only the natural result of business transactions of the year 1913 
which left to trade a large balance to its credit. 

In 1913 the export item, $34,315,800, was larger than the import 
item, $28,535,800, by $5,780,000, so that the liabilities assumed in the 
first six months of 1914 were based not on credit alone, and for this 

* Of this item $500,000 has been paid up. 



366 PAN AMERICAN FINANCIAL CONFERENCE. 

reason when the war broke out and the consequent general restriction 
of business came, it was not found necessary to grant a moratorium 
either in favor of the banks or of private business men, and the 
condition of unstable equilibrium readjusted itself with no other 
resource except economy in expenses and skillful management of 
capital. 

The banks thought it advisable not to press from their clients the 
immediate payment of their standing loans, but adopted a wise 
policy of waiting, which made the settlement of their debts com- 
paratively easy. 

Conditions were so favorable and so clear at the beginning of 1914 
that certain enterprises, as for instance the Electric Energy Co. 
(light and power), the cotton mills, and some of the sugar-cane fac- 
tories in different sections of the country decided to enlarge their 
plants, and a powerful syndicate of capitalists in Bogota planned to 
start anew a foundry and iron works which had not been worked for 
years, and to turn it into an up-to-date plant where steel rails, etc., 
could be made, in order to begin building railways, bridges, and all 
sorts of structural steel works in the interior of the country, with 
material manufactured in the country. 

But as a natural consequence of the outbreak of war, the help 
offered by the European money market to the impulse of commerce 
and trade was withdrawn. 

There is in Colombia a wide and safe field in which American 
enterprises can work and invest their capital if they only take 
advantage of the friendly attitude that existed in 1914. If up to the 
present the Colombian people have shown themselves somewhat re- 
luctant in trying to obtain the help mentioned, it is due only to the 
fact that the pending treaty between Colombia and the United States 
has not yet been ratified by the United States so that Colombia could 
open the country to the activity of American enterprises, in the most 
friendly spirit, as she earnestly wishes to do. 

But outside of private undertakings there is still a great deal to be 
done in Colombia to supply the needs of municipalities, such as light- 
ing plants, slaughterhouses, public markets, tramways, etc. Should 
the needed capital be available, perhaps it would be possible to obtain 
from the municipalities as a guaranty of the money invested, the 
management or administration of the work done during the time until 
the capital and interest is paid back. 

The possibility of the United States getting a considerable pro- 
portion of the part taken by the European markets in regard to the 
economic activity of Colombia has for a basis a double feature : 

1. The capacity of the United States to consume a larger porpor- 
tion of the produce of Colombia than they are drawing at present. 



GROUP CONFERENCE REPORTS COLOMBIA. 367 

2. The capacity of Colombia to consume American products so far 
not known in Colombian markets, and new articles and products for 
new industries. 

As to the first, it is up to the American importers to find a market 
for their surplus of merchandise, and since it is a matter of such great 
concern it is expected that they are already doing so. 

Kegarding the second point, Colombia is already trying, with some 
success, American products for those usually drawn from European 
countries. For instance, the exports from New York for the first 
four months of 1915 are 30 per cent larger than those of the corre- 
sponding period of 1914, $2,170,000 against $1,943,000. 

But there are new lines for the development of American com- 
merce, the scope of which can not be measured, but may safely be 
stated as enormous. Mining (gold, coal, oil, copper), the establish- 
ment of packing houses near the coast, and especially the building of 
railways and dredging of rivers are the most immediate items for 
investment. In fact, Americans have just now in Colombia the same 
opportunities that the English had and so cleverly took advantage of 
in Argentine from 1860 to 1880, and which made them the leading 
factor in that country's progress. 

It is now the time for loans and financing to come into play, as the 
most effective instruments to secure trade and business. 

Public loans to the Government and municipalities, large financing 
facilities to private enterprises or to merchants and planters, together 
with a system of banking branches or real banks with American and 
native capital are the right moves to begin with. 

American commercial and financial interests must be put in direct 
contact with the requirements of Colombia if the mutual commerce 
is to be turned toward the United States, making the city of New 
York the exchange market for both countries. 

Also, banking agencies in Colombia may take for them the financ- 
ing of seasonable crops as it is done by European houses. The coffee 
planter, for instance, has to spend money in salaries, working .ex- 
penses, transportation of products, etc., before he gathers his crops, 
and in order to be able to accomplish all this he is to-day accustomed 
to draw on European firms, to whom he later consigns his coffee. 

TRANSPORTATION. 

It is obvious that all efforts in the way of developing and extend- 
ing trade and business between the United States and Colombia 
require for their final success facilities for transportation as rapid 
and cheap as possible. 

In fact, before the outbreak of the European war four principal 
periodical lines of steamships plied between Colombia and the 



368 PAN AMERICAN FINANCIAL CONFERENCE. 

United States, so that the former country had means sufficient for the 
interchange of her trade. Besides rivalry between the different 
lines — which, by the way, flew flags of different nationalities — gave 
the exporters the opportunity of sending their products at reason- 
able freight rates. The space available in these steamers was suffi- 
cient for the former Colombian trade, and the steamship companies 
had ample time in which to increase their fleets when required. It 
is absolutely necessary, however, for the development of commerce 
that the freights be considerably lowered, since they absorb a large 
part of the profits. 

The lines of steamers doing the trade service between Colombia 
and the United States before the European war broke out were: The 
United Fruit Co., weekly sailings, American; Hamburg American 
Line, weekly sailings, German; Eoyal Mail Steam Packet Co., fort- 
nightly sailings, British ; Panama Railroad Co. steamers, weekly sail- 
ings, American — in all about 15 steamers each month. 

The principal object of the data in general furnished in this brief 
report is to impress the minds of financiers and bankers meeting in 
this conference with the idea that although Colombia as a field of 
investment is undoubtedly small at present, it is safe and firm, and 
just now is especially susceptible of a large development, particu- 
larly in view of the fact that the Colombian markets are at a distance 
of only 1,900 miles from New York and 1,400 miles from New 
Orleans. 



EXHIBIT C. 

Colombia's Trade in 1913. 

[From official documents.] 

Colombia sold to foreign countries $34, 315, 800 

And bought from them 28, 535, 800 

. Balance on her side 5, 780, 000 

This means that she was not indebted to foreign countries as a 
result of her commerce in 1913, and it explains why she did not con- 
sider necessary, as other nations did, to protect her citizens by means 
of a moratorium in the present critical emergencies. 

The main features of the adjoining tables are: 

in exports. 

Colombia sends to United States 55 per cent of her products. 
Colombia sends to Great Britain 16 per cent of her products. 
Colombia sends to Germany 9J per cent of her products. 



GROUP CONFERENCE REPORTS COLOMBIA. 



369 



IN IMPORTS. 

Colombia takes from United States 26| per cent of her imports. 
Colombia takes from Great Britain 20 per cent of her imports. 
Colombia takes from Germany 14 per cent of her imports. 

IN REGARD TO THE UNITED STATES. 

The United States buys from Colombia $18,861,800. 

The United States sells to Colombia $7,629,000. 

It is particularly in textiles where the United States is far behind 
Great Britain and France, in agricultural machinery behind Great 
Britain, and in paper and cardboard behind Germany. 

1918. Imports into Colombia from foreign countries. 





United 

States. 


Great 
Britain. 


Germany. 


France. 


Bel- 
gium. 


Italy. 


Other 
countries. 


Total. 


Textiles ; . 


SI, 520, 100 

1,474,100 

1,119,000 

756,300 

601,600 

424,200 
305,600 

193,400 

147,000 

115,300 

86,000 

38,000 
848,900 

7,629,500 


$3,447,700 

83,800 

1,055,600 

165,400 

148,200 

102,800 
79,900 

268,400 
34,500 
36,100 

139,200 

7,000 
268,800 


$582,700 

706,100 

751,100 

139,700 

3,700 

178,600 
47,300 

19,000 

121,800 

212,500 

121,900 

522,700 
605,000 


$3,234,900 

82,100 

125,300 

21,300 

20,200 

148,300 
12,100 

3,900 

6,800 

57,400 

362,500 

8,100 
325,200 


$144,700 
54,900 
48,100 
80, 600 
19,400 

29,800 
15,600 

1,000 

2,000 

24,200 

21,100 

9,700 
47,900 


$534,100 

30,300 

15,800 

100 

23,000 

4,900 
1,400 

100 

7,300 

26,100 

37,200 

100 

45, 700 


$1,991,000 

386, 100 

48,800 

700 

87,700 

58,600 
61,600 

18, 10C 

900 

84,000 

283,500 

20,000 
833, 700 


$11,455,200 
2,817,400 
3,163,700 


Foodstuffs 

Metals 


Cars, carriages, etc 
Materials for arts. 
Drugs and chem- 
icals 


1,164,100 
904,300 

947,200 


Fuel and lighting. 

Agricultural and 
mining imple- 
ments 


523,500 
503,900 


Electrical sup- 


320,300 

555,600 

1,051,400 

605,600 
2,975,200 


Paper and card- 


Wines, liquors, 

and drinks 

Arms and muni- 


Sundries 




Total 


5,837,400 


4,012,100 


4,408,600 


499,000 


726,100 


3,874,700 


26,987,400 



Postal parcels $1, 548, 400 

Total imports 28,535,800 

1913. Exports from Colombia to foreign countries. 





United 
States. 


Great 
Britain. 


Germany. 


France. 


Belgium. 


Other 
countries. 


Total. 




$2,400 

1,543,500 

3,442,800 

12,903,500 

800,600 

9,000 

160,000 


$700 

334,200 

1,569,500 

3,428,400 

97,800 

2,500 

132,900 


$200 

382,500 

91,200 

2,706,200 

29, 800 

6,300 






$82,500 
469,600 
18,100 
4,581,000 
84,300 
29, 700 
3,500 


$85,800 
3,362,700 
5,514,600 


Animal products 

Mineral products 


$52,900 

393,000 

342,500 

4,600 

1,200 

3,700 


$580,000 


Vegetable products . . . 
Manufactures 


13, 700 


23,975,300 

1,017,100 

48,700 

300,100 
















Total 


18,861,800 


5,566,000 


3,216,200 


797,900 


593, 700 


5,268,700 


34,304,300 





Gold coin by parcel post. 
Total exports 



$11,500 
34,315,800 



98257°— 15- 



-24 



COSTA RICA 



371 



COSTA RICA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir : We respectfully beg to submit the following report : 

Section I. — Public finance. 

The population of Costa Eica is 400,000. 

The total debt is $17,000,000, of which about $8,000,000 is English 
credit, $7,000,000 is French credit, and $2,000,000 scattered. 

As a result of the European war the custom . revenues for the 
first three months of 1915 resulting from imports decreased about 
60 per cent. The income from all sources for the first three months 
of 1915 totaled 1,589,630 colones, equal to $794,815, as against an 
income for 1914 for the same period of 2,441,402 colones, equal to 
$1,220,701. There resulted a situation which gave rise to a lack of 
exchange on the United States, thereby causing a paralysis in the 
transactions of the markets of the country and tending further to 
reduce Government revenues, against which there is now proposed 
legislation tending toward the imposition of a permanent direct tax 
on land and incomes. 

The delegates from Costa Eica have in mind a plan to borrow 
$500,000 in gold in New York, to be guaranteed by the Government, 
for the purpose of tiding over the present difficult situation in the 
exchange market. The normal rate of exchange on New York is 
115 per cent, whereas by reason of the present situation it has gone 
as high as 185 per cent (the meaning of this quoted rate of exchange 
is that at the high rate it takes 2.85 colones to buy $1, whereas in 
normal times only 2.15 colones) . The credit so secured in New York 
would be utilized by the Government selling drafts to the local 
merchants in Costa Eica for the purpose of purchases in the United 
States at a fixed rate of exchange, and the proceeds thereby obtained 
in local currency would be deposited in Costa Eica with the repre- 
sentative of the American bank making the loan, so that in addition 

373 



374 PAN AMERICAN FINANCIAL CONFERENCE. 

to the guarantee of the Government there would be an actual deposit 
of the cash in local currency. 

When the coffee crop of Costa Eica begins to come forward next 
November the balance of trade will be readjusted and from the pro- 
ceeds of such crop the Costa Eican Government will be able to re- 
place the exchange at a normal rate, and will cover the loan in New 
York. The total operation would take a maximum of twelve months. 

Section II. — Monetary situation. 

The monetary situation of the country is normally satisfactory, 
as it is on a gold standard, and the only difficulty that has arisen has 
been caused by the temporary disarrangement resulting from the 
European war. As a consequence the Government was forced to sus- 
pend the law of paper conversion, which law stipulated that the 
bank-note issues of the country must be redeemed in gold. It was 
impossible to maintain the operation of this law for the reason that 
the country would have been depleted of gold if the law had not 
been suspended, and the banks would have been jeopardized. 

Section III. — The present banking situation. 

There are three banks in the country which are entirely satisfac- 
tory and adequate for mercantile operations. In addition to these 
three banks since the war, as a temporary measure to cover the deficit 
of revenues and assist their merchants and farmers over the crisis, 
the Government has established the Banco Internacional, with a 
restricted issue of bank notes to the extent of 4,000,000 colones, 
secured by a new issue of 2,000,000 colones, 6 per cent interior bonds 
in conjunction with 2,000,000 colones, exterior refunding bonds of 
face value of £332,000, now in escrow in a New York bank. 

Section IY. — The financing of public improvements. 

There is no comment on the matter of financing public improve- 
ments, as these have been well taken care of locally. 

Section Y. — The financing of private eterprises. 

The delegates from Costa Eica stated that the Pacific Eailroad is 
owned by the Government and is in satisfactory condition. The 
Atlantic railroads are owned by English and American capital. 

In regard to public- service corporations, they are representative 
of London capital invested there, and of municipal and local owner- 
ship. 

The most urgent need of the merchants in Costa Eica is that of 
adequate credit facilities. The transactions with the European 



GROUP CONFERENCE REPORTS COSTA RICA. 375 

markets have been on longer terms and more favorable rates of 
interest than those usually obtained in the transactions with the 
United States, but it is hoped that by reason of the facilities now 
accorded by the Federal Keserve Act to the national banks of the 
United States to give their acceptance to long-sight drafts arising 
from exports and imports that a means is at hand for providing 
the merchants of Costa Eica with facilities which will be comparable 
to those they have enjoyed with the European countries. If our 
banks will form intimate connections with the bankers of Costa 
Rica and cooperate in the opening of commercial credits to the 
local merchants for their imports and exports, it is felt that much 
will be accomplished in furthering our trade. 

We understand that the Chamber of Commerce of Costa Rica is 
in a position to furnish credit ratings of the merchants in that 
country and would be glad to cooperate with the Chamber of Com- 
merce of the United States and mercantile agencies to the end that 
this information be published in a rating book available to mer- 
chants and manufacturers in the United States. 

We therefore offer to the conference the suggestion that similar 
information reliably given and available in one book covering all 
South and Central American countries would immeasurably expedite 
export transactions from the United States. 

The financing of seasonable crops of the country would come under 
the same operation as the financing of the needs of merchants. 

Section VI. — The extension of inter-American markets. 

(a) Long-term credits is an essential to the extension of American 
trade in Costa Rica, following the European custom of giving credits 
of from six months to a year. It is urged upon both the American 
and Costa Rican bankers to cooperate to the fullest extent in the 
granting of commercial credits, based on American acceptances, 
which would be discountable by the Federal reserve bank. 

(h) The subject of acceptances and discounts as a means of ex- 
tending inter- American trade has already been covered. 

(c) Direct exchange exists with the United States and shipments 
to and from the United States with Costa Rica are not financed 
through Europe. 

(d) American manufacturers should be careful to adapt their 
goods and packing to the tastes and needs of the Costa Rican con- 
sumer in order to compete with the European shippers who have 
gone into this matter most scientifically. The information as to 
these details is obtainable through the Department of Commerce of 
the United States. 

(e) There are no preferential tariffs, and trade with the United 
States is on an equality with that of the rest of the world. 



376 PAN AMERICAN FINANCIAL CONFERENCE. 

Section VII. — Merchant marine and improved transportation 

FACILITIES. 

(a) There are ample shipping facilities for ocean traffic and ex- 
cellent passenger service. 

(b) Money-order and parcel-post facilities exist through conven- 
tions with the United States. 

(c) The committee is advised that the Costa Kican Government 
contemplates legislation legalizing liens to secure the repayment of 
advances to planters, thereby strengthening credits extended through 
local banks and merchants for the planting and gathering of the 
crops; a like plan is proposed for the financing of cattle and other 
live-stock industries. 

(d) The Government has legislated for the establishment of 
bonded warehouses and public stores and for the issuing of Govern- 
ment warrants against the commodities warehoused. This plan is 
similar to the one which now prevails in Argentina. 

(e) The greatest facility is given by the customs regulations to the 
importers in case of delay in the receipt of shipping documents. In 
the event of controversies arising from imports, the matter is sub- 
mitted to the administrator of customs with appeal to the minister 
of finance, or finally to the civil courts. The committee is of the 
opinion that controversies arising between foreign shippers and Costa 
Eican merchants should be submitted to arbitration of a joint com- 
mittee of chambers of commerce, and that this method would be more 
useful, practical, and expeditious than a general reform of the laws. 

In cases where the Costa Eican importer does not receive the cor- 
responding bill of lading for his shipment, he is not permitted to 
obtain possession of the goods, whether consigned direct or to order, 
except by depositing at the customhouse either an ample guarantee 
or actual cash to the value of the shipment. This provision is an 
excellent protection to the foreign shipper, and an instance was 
related by the Costa Eican delegates of a case in which the consignee 
fraudulently came into possession of the goods in spite of the above- 
stated provision, and the minister of finance, for the Government, 
made good the amount of the invoice to the local agent of the foreign 
shipper. 

Foreign patents and trade-marks are well protected. 

It is the consensus of opinion of the committee that this Pan 
American Conference is most timely and of the greatest importance 
to all the countries of America, and that the interchange of views 
looking toward mutual help and reciprocal interest will result in 
practical and lasting benefits to all concerned. For the conception 
of this conference and its success we are greatly indebted to the 
Secretary of the Treasury, the Hon. William G. McAdoo. 

Eespectfully submitted, 

Mariano Guardia Carazo, Chairman. 



CUBA 



377 



CUBA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury ', 

Chairman Pan American Financial Conference, 

Sir: The relations of Cuba with the United States have been so 
close since the recognition of Cuban independence by the treaty of 
Paris in 1899 that the further steps required to bind the two coun- 
tries more closely together may be defined perhaps with greater 
precision and detail than the relations of the United States with 
other countries. The reciprocity treaty of 1903 between the United 
States and Cuba recognized that if the trade of the two countries 
with one another was to prosper, mutual concessions should be ac- 
corded to certain products of each in the markets of the other. 

So clearly has it been recognized that these special relations 
existed between Cuba and the United States that many measures 
are already in force for promoting intimate commercial and finan- 
cial relations which in the case of other countries are only in the 
preliminary stage. From the beginning the national loans of Cuba 
were taken by American bankers and are still held largely in the 
United States. The means of transportation and other public util- 
ities have also been to a large extent established and are now oper- 
ated by American capital. The United States has come to be a pur- 
chaser of more than 80.2 per cent of the products exported from 
Cuba and has increased her proportion in importations into Cuba 
to 52.8 per cent. 

United States currency was early introduced as official money by 
the Government of Cuba and is employed in commerce as a supple- 
ment to the gold money of Spain and France. It has been the proud 
boast of the business community that these gold currencies have been 
constituted the standard of contract obligations even during the most 
trying experiences in the economic and political life of the Kepublic. 
The recent adoption by Cuba of a monetary system based upon the 
gold dollar of the United States and the prompt adoption of the 
new national money as the standard of operations on the produce 
exchanges, on the Stock Exchange of Habana, in the quotations for 
sugar, and in the revised railway tariffs constitute a recognition of 

379 



380 PAN AMERICAN FINANCIAL CONFERENCE. 

the primacy of the money market of the United States in American 
financial affairs which can not fail to simplify and amplify the finan- 
cial and commercial relations of both countries. 

In the issue of national loans to Cuba, American bankers have been 
content with putting the proceeds entirely at the command of the 
Cuban Government and have made no effort to enforce the principle 
that such loans should be employed in the purchase of American 
products, as has been so often done by foreign bankers in making 
loans abroad. Nor, except through the influence of the normal course 
of exchange, has the effort been made to enforce the principle that 
" Trade follows the loan." 

With so much progress already made in the direction of close 
and reciprocal commercial relations it is necessary only for the 
American delegates to second cordially any measures which will 
remove further obstacles to the unfettered movement of commerce 
by modification of the tariff, by the revision of reciprocity treaties, 
by uniformity of customs regulations, by the simplification of the 
system of the parcel post and international money orders, and by 
any other measures which are not in conflict with the interests of 
the United States nor with her other international obligations. 

It is the belief of the American delegates that cooperative effort 
by the two Governments and by the merchants and bankers of the 
two countries to remove further obstacles to trade will afford a 
wider market for American products in Cuba and bring more nearly 
to a level the present excess of American imports of Cuban products 
over the exportation of American products to Cuba. The merchants 
of the United States should be capable, with proper adaptation of 
their products to the Cuban market, of increasing their sales of sugar- 
mill and agricultural machinery, of hardware, textiles, boots and 
shoes, food products, and many other articles. To accomplish these 
ends it is recognized that American merchants should study more 
carefully than heretofore the requirements of the Cuban market, 
should adapt their styles to Cuban climatic conditions and tastes, 
and should employ only competent men of high character and famil- 
iar with the Spanish language as their representatives in Cuba. 

For the purpose of carrying out these general ideas the American 
members of the Cuba Group Conference have agreed upon the fol- 
lowing resolutions, and the recommendations therein contained are 
unanimously approved by all the members of the conference group. 

1. TRADE RELATIONS. 

(a) The Cuban delegates have specifically brought to the atten- 
tion of the conference the very high duties imposed upon Cuban 
tobacco which hinder the development of that important trade with 



GROUP CONFERENCE REPORTS CUBA. 381 

the United States. The American delegates recommend the careful 
and immediate study of this situation. 

(b) The trade between Cuba and the United States owes much to 
the beneficial effect of the reciprocity treaty existing between the 
two countries. The delegates from Cuba have brought to the 
attention of the conference the grave situation produced by the 
abolition of duties on imports of sugar into the United States and 
the disappearance of preferential treatment of some other leading 
staples, and they suggest the extension of the principle of reciprocity 
to other commodities entering into the trade of the two countries. 
Without submitting any definite recommendation on this subject, 
we are, nevertheless, of the opinion that the representations of the 
Cuban delegates are of such merit as to entitle them to special and 
further consideration in connection with any movement to improve 
trade relations between the countries participating in the confer- 
ence by means of tariff revisions or commercial treaties. 

2. TRANSPORTATION. 

Communication with Central and South America is Cuba's chief 
unfulfilled need in the field of transportation facilities. It is urgently 
recommended that careful consideration be given to this need in con- 
nection with any measures taken or provisions made for the estab- 
lishment of regular and improved transportation between the United 
States and Central and South America by making the ports of Cuba 
regular ports of call for ships plying in the trade between the two 
continents. 

3. PARCEL POST. 

We are strongly in accord with the recommendation of the Post- 
master General of the United States that the parcel-post facilities 
should be enlarged. The obstacle to such arrangement with Cuba 
lies largely in the provision of the United States tariff, which re- 
stricts the use of the parcel post to a minimum of 3,000 cigars or 
cigarettes, and virtually nullifies the use of the parcel post for Cuba. 
On the other hand, the absence of a parcel-post treaty prevents 
Cubans from buying a great number of articles which they could get 
from the United States and which they now get from France and 
Germany under parcel-post treaties with these countries. 

4. INCREASE OF CUBAN TRADE WITH THE UNITED STATES. 

The attention of American merchants and manufacturers should 
be specifically directed to the large volume of merchandise imports 
into Cuba from countries other than the United States, amounting 



382 PAN AMERICAN FINANCIAL CONFERENCE. 

in the fiscal year 1913 to more than $60,000,000 in value. It is believed 
that a careful study of the requirements of the Cuban people, includ- 
ing the necessary system of credits to be employed in developing 
the business, would lead to a great increase in the amount of exports 
from the United States. 

5. LESS RESTRICTED CREDITS. 

We are of the opinion that one of the causes why trade between 
the United States and Cuba has not been more developed is that 
normal commercial credits — that is, credits adjusted to the condi- 
tions and need of the Cuban trade, especially with regard to length 
of time, are not given by the merchants of the United States. Ill 
this respect the situation of Cuba is identical with that of South 
and Central American countries. We therefore recommend that this 
matter be presented to the leading commercial bodies of the United 
States, to the end that it may be carefully studied, with the object that 
less restricted credits be granted, especially in view of the fact that 
trade statistics with those countries show that unusually small losses 
have resulted from such practice. 

6. PROPER COMMERCIAL REPRESENTATION. 

American merchants as a lule are at a great disadvantage in their 
commercial relations with Cuba and other Spanish- American coun- 
tries, caused by lack of knowledge of the language, laws, and cus- 
toms of the country on the part of their representatives. 

Special attention should be given to the subject of preparedness 
on the part of agents or representatives of American business houses 
and financial institutions in order to facilitate the handling of com- 
mercial transactions. 

7. SAMPLES AND STANDARDS. 

In order to cultivate a more thorough knowledge of commercial 
requirements, it is recommended that there be cordial cooperation of 
the diplomatic and consular officers of both countries in maintain- 
ing samples, standards, and statistical data showing the character of 
the demand in each country for the products of the other. 

8. COMMERCIAL INFORMATION. 

The attention of the Departments of State and Commerce of the 
United States is invited to the great service that could be rendered 
the trade with Spanish- American countries if read}^ reference man- 
uals were prepared by these departments in cooperation and con- 



GROUP CONFERENCE REPORTS CUBA. 383 

sultation with the Pan American Union and with representatives of 
the United States Chamber of Commerce, containing in popular, 
easily usable form information regarding the commercial, financial, 
and banking laws of the several countries. 

9. UNIFORMITY OF COMMERCIAL LAWS. 

We cordially commend and approve the plan outlined by the Sec- 
retary of the Treasury of the United States for the creation of a 
permanent joint high commission to recommend to the countries 
represented in this conference uniform laws on bills of exchange, 
checks, warehouse receipts, and other commercial instruments, and 
the establishment of an international tribunal or other agency of 
adequate scope to promote and secure the uniform application and 
interpretation of such laws. 

10. COMMERCIAL ARBITRATION. 

We favor the appointment of arbitration committees formed by 
business men to settle difficulties and disputes that may arise in com- 
mercial transactions between the citizens of the several countries. 

On motion, duly seconded, it was unanimously 

Resolved, That this committee can not close its labors without an 
earnest expression of its high appreciation of the f arseeing and pa- 
triotic action of the Hon. William G. McAdoo, Secretary of the 
Treasury, in calling into being this Pan American Conference, and 
of the zeal with which he has fostered and aided its deliberations, 
and to add their conviction that its results will be commensurate 
with the desires and expectations of the citizens of both Americas 
for a genuine and far-reaching union of their respective interests 
and aspirations. 

Respectfully submitted. 

Pablo Desvernine y Galdos, Chairman. 



APPENDIX. 

Memorandum Submitted by the Cuban Delegation. • 

The Cuban delegation to the Pan American Financial Conference 
has prepared the following report, which treats in a very summary 
manner of the different matters brought to its attention by the hon- 
orable Secretary of the Treasury of the United States. 

"We wish to remark at the beginning that the commercial and 
financial relations between the United States and Cuba are of such 
importance and magnitude, and so very close, that Cuba is not in 
such great need of bringing about great changes in its intercourse 
with the United States in the same measure, at least, as the other 
countries of America, but mutual cooperation will always, of course, 
contribute to help the trade between both countries. 

To give an idea of the importance which our trade relations with 
the United States have already reached we have only to point out 
the fact that very nearly 90 per cent of the total exports of Cuba are 
now brought to the United States, while approximately 63 per cent 
of the total imports of Cuba come from the United States. 

This, obviously, is due in a great measure to the beneficial opera- 
tion of the reciprocity treaty entered into between the two countries 
in the year 1903, as may be seen by the statistics showing the increase 
in the reciprocal trade relations since the treaty was put into effect. 
The fundamental feature of this treaty is the mutual concession 
which both nations have made to each other in their respective tariffs, 
on a plan, however, in which Cuba gives to the United States more 
concessions, in matters of reduction of customs rates, than the United 
States has actually made to Cuba by that treaty. If as a result of 
the present tariff law of the United States, all sugars are admitted 
free of duty to this country, Cuba will not then hold a preferential 
position in regard to other sugar-producing countries, and the treaty 
will cease to benefit Cuba unless some other agreement is enacted 
which will make up for the loss of that preference, the only substan- 
tial one that the treaty provides for Cuba. 

After these preliminary remarks, and coming to the specific ques- 
tions suggested by the honorable Secretary of the Treasury for the 
consideration of the group committees, we beg to submit the follow- 
ing suggestions, which, of course, have to be made in a very cursory 
384 



GROUP CONFERENCE REPORTS CUBA. 385 

manner because of the short time that we have had at our disposal 
since we were specifically informed of the questions to be considered 
in the conference and the early date at which our report must be sub- 
mitted. 

Public revenues have certainly been affected in Cuba by recent 
events in Europe, but the situation could not have been otherwise, 
since even before the war causes had already begun to work against 
the trade of Cuba. The principal of these causes was the low prices 
received for sugar during the years 1912, 1913, and 1914, which 
diminished the purchasing power of Cuba and operated in causing 
a decrease in the imports and accordingly a proportionate shortage of 
our public revenues. The breaking out of the war would have had a 
truly disastrous effect on our trade with foreign countries but for 
the fact that the absence of the competitive sugars of Germany, 
France, Kussia, and other European countries in the world's market 
has advanced the prices of Cuban sugars to a considerable degree 
in comparison with those of the two previous years; and this, of 
course, has in some measure made up for our losses in other branches 
of trade which have been brought about by the European conflict. 
Our crop of sugar may reach this year perhaps 2,560,000 long tons, 
and at present quotations would naturally bring in the neighborhood 
of 225 millions of dollars. This sum will contribute a good deal 
to restore the purchasing power of Cuba and to strengthen the 
public revenues, which will be affected, however, by the losses that 
Cuban trade will have to suffer in other branches, such as tobacco, 
lumber, etc., on account of the terrible events in Europe, where a 
large proportion of these products is marketed. 

As Cuba depends for the largest portion of her expenditures on the 
receipts obtained through the customs, these public revenues must 
have been affected by the war, although there seems to be reason to 
expect that the shortage in the receipts will not be so large as may 
appear on paper, because, notwithstanding the appropriations al- 
lowed in the budget, the expenditures have been checked wherever it 
has been found possible to do so by introducing economies in the ex- 
penses for the running of the Government. 

Moreover, other measures have been adopted by the Government 
to meet this situation, and among others, those of the law of October 
29, 1914, known as the law of economical defense, which authorized 
the issue of Treasury bonds up to $5,000,000, with interest at 6 per 
cent per annum, and payable in three annual installments. These 
bonds may be given in payment of all obligations contracted by the 
State. 

At the outbreak of the war there was in Cuba a moment of fright 
and alarm, for fear that money would be so scarce as to prevent the 
98257°— 15 25 



386 PAN AMERICAN FINANCIAL CONFERENCE. 

movement and sale of the crops, but the fact is that notwithstanding 
the cancellation of foreign credits by European bankers the condi- 
tions in Cuba were not seriously affected, not only because that with- 
drawal occurred at a time when bank credits are not generally used 
by local banking institutions, but because credits were also extended 
by New York banks during the fall. These extensions, which were 
made in a much more liberal manner than had been done before, 
helped us in a measure, and, if continued, will mean an increase of 
international cooperation between the United States and Cuba in 
the future. 

As to the monetary situation, we have to say that before the out- 
break of the war in Europe the value of Spanish silver had been 
rising in relation to Spanish and French gold and American cur- 
rency. The current medium used in the retail trade in Cuba, or at 
least in the largest portion of the country, has been Spanish silver, 
which is also used for the payment of labor in industrial and agri- 
cultural concerns, with the exception of cigar makers and perhaps 
other exceptional branches of labor. This rise of price in Spanish 
silver became more acute after the war took place, and even Spanish 
and French gold began to get very scarce because it was very difficult 
for our banks to obtain French gold, which, as is well known, was 
at that time legal money in Cuba, together with Spanish gold, which 
had become scarce before French gold. This, of course, resulted in 
the advance in price of both French and Spanish gold, which cir- 
cumstances moved our Congress to pass a law coining gold and silver 
money to circulate as legal money in the Kepublic. Up to a short 
time before we sailed from Habana to attend this conference only a 
small amount of Cuban gold had been put in circulation and about 
double that amount in silver had arrived in Cuba. As is well known, 
all this money will have been coined in the United States Mint at 
Philadelphia, and it is generally considered that the introduction of 
this new Cuban money will contribute considerably to settle the 
monetary situation, as only the new coined money, together with 
American money, is declared the legal money of the country. Our 
system of money is based on the gold standard, because if it is true 
that silver has been also coined on a parity with gold, it is no less a 
fact that, according to the law, only 8 per cent can be paid in silver in 
payments of amounts exceeding $10, and for sums up to $10 the pay- 
ments can be all in silver. 

It is not possible for us to express a conclusive opinion as to the 
uniformity of the monetary standard for all the countries of America 
represented at this conference, but we are able to report that, so 
far as Cuba is concerned, she has taken a forward step in adopt- 
ing a system of coinage founded on a parity with the American 
gold dollar of the United States, and, besides, this new monetary 



GROUP CONFERENCE REPORTS — CUBA. 387 

law declares United States money legal tender in Cuba. Therefore 
we have placed ourselves on the same basis as this country so far as 
the monetary unit is concerned, because we have the same system of 
gold money, and legal money of the United States is expressly 
declared by law to be legal money in Cuba. 

As a consequence of this new law, provisions have been made in 
our country to have all prices quoted in the new monetary unit which, 
as before stated, has as its basis the United States unit. The Habana 
and several of the other exchanges in Cuba have decided to make 
their quotations in this new unit, including the prices of sugar, which 
up to this present time have been quoted by the old Spanish system 
based on another unit, the real, the value of which was 12J cents. 
There is, of course, no doubt that the effect of having the quotations 
in this new unit of the dollar and in terms of dollar exchange will 
facilitate the financial transactions between the United States and 
Cuba. Prices, therefore, will now be better understood by the 
people of both countries than before, when recourse had to be had 
to figuring and calculations in order to find the equivalents of the 
money of each, and accordingly it is certain that the new step 
taken by Cuba in regard to this matter will bring about closer rela- 
tions between the two peoples and will work to the advantage of the 
commerce and trade of both. 

As to the conditions existing prior and subsequent to the outbreak 
of the European war, there has certainly been a change which has 
made American banking facilities more available to Cuban business. 
Prior to the beginning of the European war a large part of the 
banking relations between Cuba and the United States was made 
through banks of Cuba with Europe (London, Paris, and Hamburg) , 
from which blank credits were obtained and used in Cuba for the 
movement of the crops and for monetary advances made to the 
planters. It has been estimated that these credits varied from 8 to 10 
million dollars, which from the month of January onward, when 
sugar is already on hand, the European banks doubled against this 
sugar so that at times as much as $20,000,000 of sugar value were 
held in the island under these bank acceptances. Money also has 
been advanced on securities as collateral which securities are quoted 
in the Habana stock exchange market and taken at 75 per cent of 
their market value, and loans against sugars are generally made by 
stating in the draft that they are secured by so many bags of 325 
pounds of sugar, with a guaranty of a trustee's certificate. 

The breaking out of the war in Europe has changed this condi- 
tion of affairs now, inasmuch as the European can not afford to 
advance money or to grant any credit, and Cuba has applied to 
United States banks for her credit. The United States banks have 



388 PAN AMERICAN FINANCIAL CONFERENCE. 

now facilitated the granting of those credits to Cuba by means of 
loans secured by sugars deposited in first-class warehouses or 
against shipments of sugars to the United States. There is no c^oubt 
that a great increase in the business between the United States and 
Cuba can be obtained when once the American bankers are con- 
vinced of the safety and security of this method of extending their 
credit. 

The establishment of branch banks would contribute a good deal 
to that end by permitting the officers of these branch banks to be- 
come acquainted with the conditions of the country, and their re- 
ports to their head offices would merit the utmost confidence and 
respect, since they would come from persons well known to the home 
offices. 

As to the underwriting of national, provincial, and municipal 
loans, it is known that our national or Government loans have been 
contracted by American firms, and there is no reason why a good 
many of our loans should not be looked upon with favor here in the 
United States, for Cuba, as well for the national as for the provincial 
and municipal loans, can certainly offer all the guaranty neces- 
sary to make them completely reliable. Cuba has never defaulted 
on any of her loans, and her securities are rated as very good invest- 
ments; this assertion is proved by the prices which they bring in 
the different financial centers of the world. 

There is no doubt that some plan should be considered to give a 
completely satisfactory status for collateral as security for com- 
modity loans, and it is certainly in response to these needs that the 
matter of organizing the warehouse-warrant system on the basis of 
Government inspection and supervision is being attended to now 
by our Congress, which will certainly arrive at some satisfactory 
solution of that very interesting matter. 

One of the questions submitted by the Honorable Secretary of the 
Treasury for the consideration of the group committees is that con- 
cerning the possibilities of securing greater uniformity in the laws 
relating to commerce, and it is certainly a very interesting question, 
for nothing works so much as an obstacle to the trade between two 
countries as the difference in their trade and commerce laws, or at 
least the absence of knowledge of the provisions of those laws. When 
a country has laws similar to those of another State in the matter 
of trade and commerce, or when the knowledge of the laws of two 
countries has been properly diffused among the commercial and trade 
classes of those countries, a great impulse is thereby given to the pro- 
motion of trade between them, and whatever might be done to secure 
as much uniformity as may be possible in matters concerning, for 
instance, laws in relation to corporations, common carriers, bills and 



GROUP CONFERENCE REPORTS — CUBA. 389 

notes, and other mercantile legal subjects, would certainly result in 
making even closer the relation of trade between those countries. 
The only difficulty in connection with the matter is that in order to 
obtain positive results in that direction many conferences and inter- 
changes of views are needed, so as to prepare a plan for a basis of uni- 
formity on which the legislatures of the countries concerned might 
take proper action. In commercial matters there is already a good 
deal of similarity' in the principles governing those relations, and it 
may not be very difficult to issue publications containing substantial 
explanations of those principles so as to spread their knowledge in 
the countries interested, and it is then — that is to say, when sufficient 
degrees of knowledge of those principles has been reached — that 
subsequent actions can be taken to obtain a substantial uniformity of 
the laws themselves, as far as it is possible and the similarity of the 
principles may permit. 

There is no doubt that there is a vast field that may be used to 
advantage for the increase and development of inter- American mar- 
kets, and it is equally certain that the establishment of direct ex- 
change on the basis of the dollar unit or dollar exchange, as already 
established in Cuba, in all the countries of America would contribute 
in a large measure to extend the trade among the different countries 
of this Western Hemisphere. As before pointed out, Cuba has 
already taken its first step, so far as the establishment of the dollar 
unit is concerned, and it is to be hoped that other States will in the 
course of time endeavor to create also the means of establishing a 
system of direct exchange. 

The extension of longer credits to Cuban purchasers, it is gener- 
ally thought, would be perhaps the strongest encouragement to an 
increase of trade between the two countries, and we consider this 
point so very important as to think that the further development of 
that trade would depend upon the adoption of that extension of 
longer credits. It is a fact that the time granted for the payment 
of credits is much longer when it is given by European merchants to 
the purchasers of their commodities than is the case when the same 
articles are purchased from the United States. For instance, it is 
well known that often even three and four annual installments are 
allowed for the payment of machinery bought in England, France, 
Belgium, or GTermany, payment being guaranteed by the same ma- 
chinery, while no such long credits can be obtained from American 
manufacturers, who seldom allow more than a year for the whole 
payment of a whole plant or part of a plant of machinery. Textiles 
are sold by Germany and England in Cuba at six months, while in 
the United States only 30 to 45 days are allowed, and the same can 
be said of other commodities and articles, such as hardware, for 
example. 



890 PAN AMERICAN FINANCIAL CONFERENCE. 

A very important point, and one which, must not be overlooked 
a moment, is that concerning the effect which tariff laws may have 
on the trade between the United States and Cuba. As is well known, 
the reciprocity treaty which secured to Cuba a preferential advan- 
tage in the importation of sugars will cease from May 1, 1916, with 
the effect that if, according to the present tariff laws, sugar from all 
the countries in the world is admitted in the United States free of 
all customs duties, the reciprocity treaty will lose all its importance 
so far as Cuba is concerned. A new treaty could be framed in order 
that other arrangements could be arrived at of mutual benefit to 
both countries. 

At all events, and even if the preferential on sugar should be con- 
tinued, the Cuban delegates feel that something should be done with 
respect to our tobacco. The very high duties which our tobacco has 
to pay at the United States customhouses should be reduced consid- 
erably, because otherwise the trade in that staple with the United 
States will in the end languish to a vanishing point, and thereby 
not only Cuba will suffer, but also the United States, by the decrease 
which will ensue in the purchasing power of Cuba. 

It must be borne in mind that the tobacco industry is only of 
secondary importance to that of the sugar trade, and, accordingly, 
if we are helped in the matter of our tobacco it would give Cuba a 
good deal more purchasing power, which would of course be used for 
the largest part in the buying of American commodities, while the 
depression of that industry in Cuba is very apt to be felt in all the 
other branches of trade. 

Briefly, then, we may point out that Cuba has been trying to im- 
prove her postal facilities with other countries ; that she is at present 
negotiating a parcel-post treaty with the United States and with 
England, and the first steps have already been taken with Spain to- 
ward the same end. The money-order arrangements may also be 
extended to all such countries of America as may be in a position to 
enter into such relations, and accordingly we arrive at the conclusion 
that the concession of longer credits and the advances of money to 
banks in Cuba under proper conditions, together with the help 
which is so necessary to develop our depressed tobacco industry, 
would prove to be the main factors for a vigorous growth of our 
commerce with the United States. 

Pablo Desvernine. 
Porfirio Franca. 
Octavio A. Zayas. 



DOMINICAN REPUBLIC 



391 



DOMINICAN REPUBLIC, 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir : We respectfully submit the following report : 

1. PUBLIC FINANCE. 

Public revenues and expenditures as affected by recent events in 
Europe. — They have been greatly affected by the war, as one of the 
chief products of the Dominican Republic, tobacco, has but one 
market, Germany ; and since August, 1914, we have had to keep our 
crop in storage and have been, consequently, deprived of the means 
of buying what we used to buy with the price of our tobacco, and 
deprived, of course, of the import duties corresponding to those 
goods. 

Measures adopted to meet the situation. — The only measures 
adopted have been the reducing of expenditures, as the Dominican 
Government does not want to create new debts. 

Proposed remedies. — The only remedy that could remove the cause 
of this evil is the finding of a new market for Dominican tobacco. 
It is desired to sell it in the United States, but that is* at present 
quite impossible, because the import duties on Dominican tobacco 
in the United States are prohibitive. These duties are not prohibi- 
tive for Cuba, on account of the excellence of Cuban tobacco, which 
brings high prices, thus permitting the payment of those duties, less 
the 20 per cent reduction granted to Cuba. But for the Dominican 
Republic the present duty is prohibitive because, being similar in 
quality to that of Porto Rico, its tobacco could only be introduced 
here under conditions similar to those granted to Porto Rico. The 
remedy proposed is thus : A reciprocity treaty which may admit this 
tobacco to the markets of the United States and admit in exchange 
some products of the United States into the Dominican Republic 
under similar conditions. 

Possibilities of international cooperation. — The procedure sug- 
gested appears to us to be the best form of cooperation obtainable, 

393 



394 PAN AMERICAN FINANCIAL CONFERENCE. 

as it would bring good results not only to the tobacco planters and 
to the treasury of the Dominican Eepublic, but also to the American 
producers of the products exchanged for Dominican tobacco. It 
would be of benefit, further, to all American manufacturers, because 
the Dominicans would buy from them the manufactured products 
they now buy in Germany with the price of their tobacco. They will 
still be compelled to buy from Germany after the war if the sug- 
gested reciprocity treaty is not passed. 

2. THE MONETARY SITUATION. 

Since 1900 the legal currency of the Dominican Eepublic has been 
the American dollar. The war has not affected the monetary condi- 
tion except in that it has stopped Dominican credits in Germany, 
thus diminishing the purchasing power of the Eepublic. 

3. THE PRESENT BANKING SITUATION. 

Aside from a very few private bankers and merchants who are 
engaged in the banking business, there are in the Eepublic two 
banking institutions, the Eoyal Bank of Canada and the Banco 
Nacional de Sto. Domingo. Neither of these issues bills as yet, and 
neither of them gets extensive deposits from the public, as very 
few people have as yet acquired the habit of depositing their savings 
outside of their own houses. The main banking business at the 
present time is the discounting of drafts made by exporters upon 
European and American houses. 

The banks also lend money, with or without collateral, to the 
merchants, manufacturers, and farmers, charging as interest from 
9 to 15 per cent a year. According to the banking law of the Do- 
minican Eepublic, any firm or corporation, national or foreign, 
either independent or a branch of a foreign bank, may issue paper 
currency up to the amount of its capital, provided that the capital 
be no less than $500,000, that it fulfill certain conditions prescribed 
by the Dominican treasury department, and that it keep in its safe 
a metallic reserve in coin to the value of half the amount of the 
issue. The latter condition, i. e., that the bank keep in its own safe 
the guaranty of its issue, and the fact that the people have been in 
times past victimized by issues not well guaranteed, produce a condi- 
tion which would bring about the failure of any bank of issue which 
could not offer complete assurance of its strength. There is no ques- 
tion, however, as to the complete success of branches of strong and 
recognized American banks, which, enjoying the perfect confidence 
of the people, would be able to issue circulating notes acceptable 
to the people and would in time be in a position to obtain their 



GROUP CONFERENCE REPORTS DOMINICAN REPUBLIC. 395 

deposits and get them into the habit of making payments by means 
of checks. 

4. THE FINANCING OF PUBLIC IMPROVEMENTS. 

The underwriting of national loans. 

(a) The Dominican Republic has at present two debts, both guar- 
anteed by the customhouse duties, one of $20,000,000 at 5 per cent 
annual interest and the other of $1,500,000 at 6 per cent annual inter- 
est. In payment of the sinking fund and interest on the first of 
these debts the Dominican Republic remits $100,000 per month to the 
Guaranty Trust Company of New York. In payment of the sinking 
fund and interest on the second the Government remits $30,000 per 
month to the National City Bank of New York. The Government 
has never failed in the punctual payment of these remittances, and 
the delegates have no instructions to negotiate any new loan. 

The underwriting of provincial or State loans. 

( b ) The Provinces of the Republic are political and military sub- 
divisions without legal capacity for obtaining loans, and which have 
never obtained any loans since the Dominican Republic has had a 
central administration and all provincial affairs have been directed 
from the capital. 

The underwriting of municipal loans. 

(c) Municipalities are independent entities with legal capacity, 
under certain limitations, to administer their own affairs, and to 
negotiate loans for the improvement of their public services, with 
the previous authorization of the House of Representatives. Most 
of them have up to this time obtained loans from private bankers, 
have always paid them, and have never placed loans abroad. There 
are, however, ample opportunities for foreign investment in this 
field. 

5. THE FINANCING OF PRIVATE ENTERPRISES. 

(a) The Republic has only two railroads and is in need of more 
transportation facilities, a need which is now being partially met 
by the building of highways, for which work the Government has 
at present money deposited in the Guaranty Trust Company of New 
York. Notwithstanding this, however, the work is proceeding 
slowly and to a very limited extent. This means that there are 
ample and highly profitable opportunities for the investment of 



396 PAN AMERICAN FINANCIAL CONFERENCE. 

capital in the building* of highways, steam railways, electric rail- 
ways, electric light, gas and power plants. 

(&), (<?), (d). The few manufactures in the Dominican Republic 
comprise soap, matches, ice, candles, hats, shoes, harness, cigars and 
cigarettes, alcohol, sugar, and chocolate. The sugar industry obtains 
its capital chiefly from bankers in New York, and the other industries 
in the Eepublic. The merchants, importers, and exporters obtained 
their credits before the present war from the United States, Eng- 
land, and Germany. German goods were bought through commission 
houses in Hamburg and other German cities on six months' credit, 
or sometimes longer, with annual interest at 6 per cent and .a buying 
commission up to 5 per cent. German merchants could get the goods 
from the German manufacturers upon the same basis with respect to 
time of payment or even longer, knowing that these goods were in- 
tended to be sold on the same time to the Dominican merchants. The 
Dominican importers were thus able to sell to the retailers on time, 
making a good deal of business on credit. Since the outbreak of the 
war, some German houses in New York have extended credit to 
Dominican importers, but have thus far been unable to meet all the 
necessities created by the war. Consequently the importers are 
handicapped by the war. It is further to be noted that Dominican 
exporters formerly obtained credit in Germany to finance the crops 
of tobacco and other products sent there by drawing drafts at 90 
days' sight without collateral, on the condition that the merchants 
were to cause products sufficient to cover the amount drawn to be in 
Germany three or four days before the draft was due. That was 
credit based upon the personal knowledge that the German mer- 
chant or banker had of the financial responsibility of the Dominican 
exporter, and thua it was a common practice, when the goods could 
not reach destination on time, for the exporter to draw an accommo- 
dation draft against another German merchant or banker to pay the 
first one, the second acceptor to be reimbursed with the products of 
the same merchandise. By means of this facility the exporter of the 
Dominican Republic was able to advance to the farmer money that 
was to be paid in products. As that system of credit has ceased since 
the outbreak of the war, the conditions of the Dominican Republic 
have been upset, affecting the farmer as well as the exporter, who 
are hoping that the American importers and bankers may be able to 
arrange to render the same service which the Germans formerly ren- 
dered. To bring this about, it is necessary that the American im- 
porters and bankers gain the same personal knowledge of the 
Dominican exporters that the Germans have. 

(e) We believe in the possibility of securing greater uniformity 
in laws relating to trade and commerce, in customs regulations, and 
the more effective protection of trade-marks. 



GROUP CONFERENCE REPORTS DOMINICAN REPUBLIC. 397 

6. THE EXTENSION OF INTER- AMERICAN MARKETS. 

(a), (&), and (c). Long-term credits, acceptances, and discounts, 
and the establishment of direct exchange have been explained in 
connection with matters treated above. 

(d) The Dominicans are used to the manufactured products of 
the United States, and may get into the habit of buying new goods 
through the medium of samples, which are admitted free of duty. 
With regards to the admission of samples, the Dominican customs 
law provides as follows: 

Class O — Articles free of duty: No. 1191, unsalable samples or 
those that have no commercial value; No. 1191 (&), samples of a 
value no higher than $2,000, introduced by bona fide commercial 
agents, for their commercial business, provided that they do not 
remain in the territory of the Eepublic more than four months, and 
that bonds be given to the satisfaction of the collector, the latter 
being obliged to inspect the samples when they enter and when they 
go out for identification of the same. 

(e) The Dominican Eepublic is seriously affected by the tariff 
laws of the United States, as it is situated between Cuba, which 
enjoys a reduction of 20 per cent, and Porto Eico, which sends here 
its products free from any duty ; and, although our lands and labor 
are cheaper than those of Porto Eico and Cuba, the competition is 
very hard to meet, and were it not for the hope of the entrance of 
our sugar free of duty in the United States our financiers would 
be without any hope, since already our tobacco is without any market. 
On the other hand, the Dominican tariff laws do not injure the 
United States, because they do not specially favor any country. 

7. MERCHANT MARINE AND IMPROVED TRANSPORTATION FACILITIES. 

(a) On account of the war, by the elimination from the seas of 
the German vessels, which constituted 30 per cent of all the tonnage 
that arrived at Dominican ports, and the circumstances of the scar- 
city of ships of other nationalities, the ocean transportation has 
suffered a great deal in the Dominican Eepublic. From the United 
States there is only one line of passenger ships plying between New 
York and the Dominican ports, making two or three trips monthly, 
and besides there are some freight ships between these ports and 
New York or Boston. Ships are commonly small craft of 2,000 to 
3,000 tons and of a speed of from 10 to 12 knots an hour, which 
make their trips from New York to the first Dominican port in 
five or six days and spend eight or nine days in reaching San 
Domingo City; it is thus desirable that the number and the speed 
of the ships be increased, as there are freight and passengers to 
justify this improvement. 



398 PAN AMERICAN FINANCIAL CONFERENCE. 

(b) The Dominicans have a parcel-post treaty with the United 
States from which desirable results have not been obtained on 
account of the absence of a money-order system with the United 
States, although a domestic system is in effect in the Eepublic itself. 
The postage rate between the Dominican Republic and the United 
States is 150 per cent higher than the one existing between the 
United States and Cuba and Mexico. It is thus desirable and neces- 
sary for the improvement of the relations between the two countries 
that a reduction be made in the postage rates and that a money- 
order system be established. In furtherance of these objects the 
Dominican delegation proposed on May 24 for the consideration of 
the conference the following proposition: 

The task of rapidly promoting a permanent increase of commer- 
cial business between the United States and the Latin- American 
countries is more than anything else an educational one. 

The war that is devastating half of the civilized world has already 
produced, and will continue to produce for some time to come, a 
tangible increase of inter- American commerce, as an inevitable re- 
sult of the closing of the ports of Germany and of Austria and of 
the withdrawal from the seas of the merchant vessels of those two 
nations. 

But the paralysis of the German and Austrian commerce is 
only temporary; and if an educational campaign, to teach the 
countries of Latin- America that here in the United States are pro- 
duced or may be produced all the manufactured goods formerly ex- 
ported by Europe, is not undertaken at once and with tenacity un- 
doubtedly when the war is over the business will return in great 
part to the channels it followed before the war. This must be true 
for the simple reason that so short an experience with the goods of 
the United States, even though it were to be supported by the good 
will of the Latin- American Governments, would be impotent by 
itself to destroy habits and prejudices of many years standing. This 
result is the more likely to follow if little be done to convince Latin- 
Americans that the diversion of trade which came about through 
necessity can best be continued upon grounds of unquestionable con- 
venience and profit. 

In an international educational campaign the most powerful 
weapon is the post. An army of traveling salesmen, as big as it 
might be, can not be compared — either in the rapidity of its effect 
or in its ability to reach the remoter regions of a country, or in its 
possibility of serving equally the small and the large manufacturers 
and exporters — with the effect of letters, circulars, and the news- 
papers. 

The efficiency of the post is undoubtedly more immediately useful 
to the producer than to the consumer, and to the manufacturer than 
to the agriculturist ; and in this respect the United States should be 
chiefly interested in such an improvement. As consumers of manu- 
factured goods and exporters chiefly of agricultural products the 
Latin-Americans have little to advertise, since they know that their 
sugar, their cocoa, their hemp, their rubber, and their coffee will be 
sold here even though not advertised; and naturally the Latin- 



GROUP CONFERENCE REPORTS DOMINICAN REPUBLIC. 399 

Americans may not see the necessity of undertaking a campaign for 
the purpose of educating their own people with regard to the fact 
that the goods they have previously obtained in Europe are also to 
be obtained in the United States. But this difficulty could easily be 
met by providing that the signatory Governments should contribute 
to the payment of the general service in proportion to the benefit 
received by each. 

In view of these considerations the delegation of the Dominican 
Republic has the honor of submitting to the conference the recom- 
mendation that a special committee be appointed to study Latin- 
American postal conditions and to propose to all the Governments of 
America a plan for a Pan American postal convention which shall 
include the following provisions : 

1. That the letter postage and the postage on circulars and printed 
matter between each and every country of the Pan American Union 
be established upon the same basis of rates as that now existing 
between the United States and Cuba and Mexico. 

2. The adoption by all the countries of the Pan American Union 
of the same rules and the same rates for newspaper postage as that 
now existing in the United States. 

3. The adoption by all the countries of the Pan American Union 
of a uniform service of postal money orders and parcel post. 

4. The establishment of a Pan American Postal Commission, with 
headquarters in Panama City, which shall act as a clearing house for 
the postal administration of all the signatory governments. 

Pending the consideration and adoption of the foregoing proposal 
the committee submits, as a suggestion for relieving the immediate 
demands of the situation, the following resolution : 

RESOLUTION LOOKING TO THE RELIEF OF IMMEDIATE DIFFICULTIES IN CON- 
NECTION WITH THE POSTAL LAWS. 

Whereas the Postmaster General of the United States has announced 
the willingness of the United States Government to establish the 
domestic rate of postage reciprocally between any Latin- American 
country and the United States ; and 

Whereas the United States Government controls the rate of postage 
on all matter mailed in the United States ; 

Resolved, That the Dominican Republic committee recommend to 
the Postmaster General of the United States the establishment of the 
present domestic rate of postage for letters addressed to each and 
every country in Latin America without regard to the rate applied 
to letters destined to the United States ; and be it further 

Resolved, That appropriate stamps be designed and issued to com- 
memorate this important step taken on the side of the United States 
to facilitate the trade with other American countries; and be it 
further 

Resolved, That a copy of these resolutions be transmitted to the 
honorable the Postmaster General of the United States. 

Respectfully submitted. 

Francisco J. Peynado, 

Chairman* 



ECUADOR 



98257°— 15 26 401 



ECUADOR. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury ', 

Chairman Pan American Financial Conference. 
Sir: The Ecuador committee has conferred with the delegates of 
the Ecuadorian Government on the subjects mentioned in the pro- 
gram and begs to report as follows : 

I. Public finance. 

(a) The fiscal revenues of Ecuador amounted, before the war, to 
approximately $10,000,000 American gold, consisting mostly in cus- 
toms duties (on imports $4,000,000 and on exports $2,600,000, alco- 
hol tax $480,000, salt monopoly $360,000) and internal resources. 
The decrease in the importations has necessarily decreased the figures 
about one and one-half to two million dollars, so that at the present 
it is estimated that the total income will aggregate about $8,000,000. 

Export duties have not been reduced appreciably, as they are 
mostly on the gross weight of certain articles exported, namely, 
cacao, coffee, hides, rubber, etc., and almost normal quotations on each 
have been reported. 

(b) The only measures adopted to meet the actual conditions 
caused by the war were the borrowing of money by the Government 
from one of the local banks and the temporary suspension of gold 
exports and of the conversion of notes. This last resort was not 
utilized by all the banks, and those that did so have been constantly 
improving their cash reserves. It is considered that these now have 
about one-half of the legal gold reserve. 

(c) The only immediate relief required in this direction seems to 
be the securing of a loan by the Government to pay the banks its 
indebtedness so that these institutions, handicapped by the heavy 
account of the treasury, may increase their gold reserves and better 
protect their note issue. 

(d) Possibility of international cooperation can only be effected 
by lending the Government the money needed, three to five million 
dollars, on reasonable conditions and for a period which would 
permit it to repay the money at its convenience. 

403 



404 PAN AMERICAN FINANCIAL CONFERENCE. 

OBSERVATIONS. 

The debt of the Government to the local banks is partly consoli- 
dated to be liquidated in 1927 and partly in current account. The 
consolidated debt, amounting to about $2,500,000, earns 7 per cent 
interest. The floating debt amounts to about $1,500,000, or a total 
of about $4,000,000. 

In addition to the debt to the banks the Government owes about 
a million of 6 per cent internal bonds and $1,500,000 of floating debt, 
making a total of about $6,500,000. 

The foreign debt proper amounts to 

4 per cent salt bonds $636,750 

4 per cent condores bonds 340,000 

976, 750 
Arrears, about 23, 250 

1,000,000 

and the guarantee of the bonds issued by the Guayquil & Quito 
Eailway to the extent of $859,740 per annum until December 31, 1931. 
The amount outstanding of these bonds is as follows : 

6 per cent prior lien bonds $1, 975, 000 

5 per cent first-mortgage bonds 10,737,000 

12, 712, 000 

interest on the former has been paid to date; interest on the latter 
is due for five coupons, amounting to $1,342,125. 

Ecuador has also guaranteed the interest on 200,000 pounds sterling 
of bonds issued by the Ecuador Central Railway (about $60,000 per 
annum) when the line is completed, and on 7,000,000 francs of bonds 
issued by the French Eailway Co. of Ecuador (about $70,000 per 
annum) . 

II. The monetary situation. 

(a) Conditions prior to the outbreak of the war were perfectly 
satisfactory. The country was and still is (except for the temporary 
restrictions) on a gold-standard basis. 

The monetary unit is the sucre (0.8136 grams gold 900 fine) equiva- 
lent to $0.4866 American gold. Notes are issued by banks established 
in conformity with the law and must be protected by 50 per cent 
gold coin. 

(h) The effects of the war, curtailing credits everywhere and dis- 
turbing in such a grave manner all foreign transactions, were felt 
during the first few months after the declaration of war. Condi- 
tions have been improving steadily, and the sale of most of the ex- 
port crops has permitted the banks to maintain rates of exchange 
well nigh within their normal limits of fluctuations. The par value 



GROUP CONFERENCE REPORTS ECUADOR, 405 

of the dollar, United States, is 2.05 sucres, and the rate of exchange 
fluctuated between 2 and 2.11 sucres in normal times and advanced 
to 2.20 sucres, or about 4J per cent, premium. 

(c) If Ecuador can maintain the sale of its export products and 
thus provide itself with funds to meet its foreign needs, there will 
be no necessity of any outside cooperation. Its main export product 
is cacao, which has doubled in price (about 120 shillings per quintal 
against 60 shillings in April of 1914), and although the rates of 
transportation have increased enormously there is a large difference 
in favor of the country. The crop amounts now to about 47,000 tons, 
and the increase in price of only $5 per quintal gives the country an 
added value in this line of nearly $5,000,000, enough to offset any 
loss in the other products. 

The total exports amount to about $15,000,000 and imports about 
$10,000,000, leaving a favorable trade balance of some $5,000,000, 
which permits the country to maintain its exchange on a level even 
under the present restricted condition of its currency. 

(d) The gold standard can, therefore, be maintained unless some- 
thing unforeseen happens. Should the Government fail to secure 
a loan with which to pay the banks, the latter would be able to 
raise their gold reserves to the normal rates by simply accumulat- 
ing the surplus of the trade balance. They may not export it in gold 
coin, but they can carry balances with American banks, which is just 
as good for exchange purposes. 

III. The present banking situation. 

(a) The banking facilities in Ecuador were quite satisfactory at 
the outbreak of the war. Its banks could attend easily the needs 
of the country, and the rate of interest for commercial loans was 
7 to 9 per cent per annum — a very common rate in Latin America. 

Ecuador has four banks of issue : In Guayaquil, Banco del Ecua- 
dor (capital 3,000,000 sucres) , Banco Comercial y Agricola (capital 
5,000,000 sucres) ; in Quito, Banco de Pichincha (capital 1,500,000 
sucres) ; in Cuenca, Banco del Azuay (capital 400,000 sucres). There 
are two mortgage banks, Banco de Credito Hipotecario (capital 
1.000,000 sucres), Banco Territorial (capital 1,000,000 sucres), and 
two mixed banks, Banco Comercial y Agricola, which has a mort- 
gage department, and the Compania de Credito Agricola e Indus- 
trial (capital 1,000,000 sucres), the last being a mortgage and sav- 
ings bank. 

The outbreak of the war caused, of course, a restriction in the cur- 
rent transactions of all the banks, but they are steadily resuming 
their normal state, and now they may be said to be almost in as good 
condition as they were last July. 



406 PAN AMERICAN FINANCIAL CONFERENCE. 

(h) Branches and agencies of foreign banks are not provided for 
in the banking laws, and, although they are not forbidden, there are 
no definite conditions under which they can operate. 

Legal reserves are enforced only on note issue, but not on deposits, 
and the general provisions in regard to agencies of foreign corpora- 
tions set forth in the commercial code are too general to cover, espe- 
cially banking institutions. 

Direct exchange has existed for many years; that is, drafts are 
drawn in dollars on the United States and drafts from the United 
States on Ecuador are drawn in dollars as well as in pounds sterling. 
Banking connections being so limited with the United States, mer- 
chants often use the bill of exchange on London as a means of set- 
tling their accounts. As London banking connections are becoming 
more difficult every day, the turning over to the United States could 
easily be accomplished if American banks would establish a means 
of financing shipments as liberally as London did. Bills on New 
York at 60 days' sight, if drawn by responsible parties on first-class 
banks or bankers, are easily negotiated. The commercial letter of 
credi'" ; is little used, as exporters draw on their correspondents clean 
or documentary bills, and local banks do not demand authority of 
drawees except in special cases. 

(c) Further international cooperation is absolutely necessary if 
it is desired to secure for the United States the advantages of being 
the distributing and clearing center of Ecuadorian trade. This can 
be secured by extending banking credit to exporters and banks just as 
much for shipments intended for this country as for those directed 
to other countries. For this it should be possible that American 
banks make due arrangements with their foreign correspondents to 
transfer values to their accounts against shipping papers or re- 
drawing, as the case may be. 

This work is especially complicated at this time, but it is easier for 
American banks to do this than for Ecuadorian banks or exporters. 
For instance, formerly a shipment of cacao to Spain was financed 
by the exporter of Ecuador drawing on London for account of the 
Spanish buyer, who made the arrangements through a Spanish bank 
(for the agent of the British bank in Spain). Now, it should be 
possible that the same shipment be financed by permitting the ex- 
porter of Ecuador to draw on an American bank against shipping 
papers for Spain and either arrange with the Spanish buyer to draw 
against him from here (in dollars or pesetas) or to arrange with a 
Spanish bank to transfer the credit. 

Should there be an agency of the American bank in Spain, the 
transaction would, of course, be easier, and Spanish shipments could 
then be financed also. 



GROUP CONFERENCE REPORTS ECUADOR, 407 

IV. The financing of public improvements. 

Ecuador has not borrowed any money directly for public works 
nor has offered any of its own bonds for other purposes. Its out- 
standing obligations originated in the consolidation of floating debts 
or guaranties of issues made by constructing companies as above 
mentioned. 

The bonds mentioned as "salt bonds" were issued to pay three 
coupons of the bonds issued by the railway company, and the 
" condores " bonds (called " condores " because they are issued in 
Ecuador currency; 1 condor equals 10 sucres) were issued to pay 
off a small balance of the old external debt. 

No issue has been made directly by the Government (other than 
the two mentioned), although it might be very desirable to con- 
solidate the guaranteed bonds, clearing a situation which is embar- 
rassing for the country, as its customs revenues are all pledged to 
a guaranty in a very unreasonable way. In fact, the guaranty in 
favor of the railway bonds amounts to $859,740 per annum and the 
revenue pledged to the service amounts to $6,600,000 (import duties 
$4,000,000 and export duties $2,600,000). There is no reason why 
the country should tie up $6,600,000 to guarantee only about 13 per 
cent of this amount. 

There are no provincial loans outstanding or authorized. The 
Provinces are not permitted to contract for loans except as advances 
of taxes to be collected. All loans are contracted only by the Gov- 
ernment itself. 

The municipalities owe very little money, and it is due mostly to 
local banks or capitalists. Only the municipality of Guayaquil has 
an indebtedness of some importance, due partly to the banks and 
partly of a floating character. The municipality of Quito has been 
authorized to contract a loan for public works, but it has only raised 
a small amount, largely with local banks. 

Fiscal as well as municipal finances have not been as satisfactory 
as could be desired. Much has been gained during the later years, 
but the decentralization of taxes to a certain extent has been respon- 
sible for a confusion in the collection of the same and the consequent 
improper balancing of revenues and expenses. 

The last figures show a deficit, partly because of extraordinary 
expenses due to political disturbances. The administration is, how- 
ever, making all efforts to keep within its own income and payments 
are met almost in a normal way. 

V. The financing of private enterprises. 

(a) There are only three railway companies operating lines in the 
country — the Guayaquil & Quito Railway Co., operating the line 



408 PAN AMERICAN FINANCIAL CONFERENCE. 

between Guayaquil and Quito (286 miles) ; the Ecuador Central, 
operating the Manta Eailway (40 niiles) ; and the French company, 
operating a small part of the line from Bahia to Quito (about 35 
miles) . These have been financed in Europe and the need for money 
has been met already. Further financing is limited at present to the 
settlement of the situation of the first-named railway, which would 
call for a reorganization of its finances in full. This is a compli- 
cated matter that needs readjustment and should be looked into care- 
fully. 

We understand that the refinancing of the other two companies 
might be desirable, but this requires looking into their affairs more 
closely than can be done at present. 

There are two street car lines in Guayaquil, both of which need 
looking into. One of these companies owns an incomplete electrjp 
plant, which needs money to finish its installation. 

Electric light exists in very few cities, there being a wide field for 
the extension of this service. Water service is very deficient, there 
being also great possibilities in the matter of supplying many of the 
cities as well as for irrigation purposes. 

Sewerage is another line of immense importance and is needed in 
almost every city. All these works demand a careful study as to the 
ability of the respective communities to pay for them. No doubt 
satisfactory arrangements could be made and the Government is 
quite willing to assist them all. 

The very important work of sanitating the principal port — Guaya- 
quil — is in the hands of a very responsible concern, but it is progress- 
ing very slowly, due to lack of immediate funds. It would be most 
desirable to look into this matter promptly and to assist the coun- 
try if possible in securing this service at an early date. 

(h) Merchants need reasonable credit. They have been accus- 
tomed to long and easy terms from Europe, and they can not buy 
for cash as has been the rule in America. It is suggested that Ameri- 
can business people interested in extending their trade consult the 
needs of their buyers, meeting their wishes as far as possible. 
Ninety-day acceptances would be something quite within the possi- 
bilities and would meet their demands. Of course this is a matter 
of adjustment with each customer and depends on the kind of goods 
sold. 

(c) Crops are financed within the country. The only way in 
which foreign credit interfered was by permitting exporters to draw 
in advance of shipments for the purposes of advancing money to 
farmers. There is no reason why this should not be done in the 
United States as well, especially with such clients as are perfectly 
solvent and honorable. 



GROUP CONFERENCE REPORTS — ECUADOR. 409 

(d) It would be very advisable to secure the means of protecting 
these advances as well as credit for merchandise shipped. Ecuador 
has a " warrant " law permitting the issue of certificates for goods 
stored in the customhouse of Guayaquil and which are negotiable. 
These could be used to protect d/p drafts. Ecuador has special 
provision in its code of commercial laws covering collateral loans 
whereby special protection is given to securities and personal prop- 
erty collaterals. 

(e) To secure uniformity of laws in certain lines it is necessary 
that a typical law be drafted and submitted to Ecuador as well as 
to all other countries of Latin America. The country is quite will- 
ing to agree to all that is reasonable and which might tend to im- 
prove general conditions of trade. Of course this requires the pas- 
sage of laws in Congress which meets in August every year. There 
is no doubt as to the possibility of securing such laws, provided they 
are intended solely for the betterment of commercial relations. 

VI. The extension of interamerican markets. 

(a) There is no need of extending long-term credits as was done 
formerly from Europe. Reasonable credit is desired, but such long 
terms as 9 and 12 months are only an undue inducement to over- 
extension and the creation of artificial trade. Three months' ac- 
ceptance, and perhaps six months in some cases, would be all that 
is needed. In only one case could long terms be commended — for 
improving farming by allowing, as is done in this country, as much 
as three years to pay for agricultural machinery and also for mining 
machinery. But this requires special guaranties, such as chattel 
mortgages, which do not exist. 

(h) Acceptances against bills of lading as a substitute for open 
accounts are desirable, as they permit the American exporter to turn 
over his money. But this requires that such bills be discounted in 
the United States. Otherwise the transaction is hardly possible. To 
keep an accepted draft until maturity is just as bad as to sell on 
open account. Arrangements should be made to facilitate the dis- 
count of bills with shipping papers attached. Before the war this 
was possible with almost every country; to-day it is restricted to 
very few countries — Ecuador being deprived of the facility at pres- 
ent for no good reason. 

(d) Ecuador has a long-time trade with the United States, and 
almost all her goods are adaptable to that market. It has been the 
practice of American manufacturers to insist on selling their goods 
just as they made them; but experience has taught them that they 
must conform with the requirements of their buyers. This is done 
now to a large extent. It would be advisable to continue the policy 
of satisfying the buyer as far as possible. 



410 PAN AMERICAN FINANCIAL CONFERENCE. 

(e) There is no discrimination in Ecuador in favor of or against 
the United States in the matter of import duties. All countries are 
under the same tariff. Some goods are very heavily taxed, and in 
each individual case it is possible to secure amendments to the tariff 
if good reasons are given. These changes, however, can not be made 
except by Congress, which meets once a year. It must be borne in 
mind that the country's revenue is derived mainly from its import 
duties and that it is a tariff for revenue only. 

VII. Merchant marine and improved transportation facilities. 

(a) Present transportation facilities are very limited, as very few 
boats call at the ports of Ecuador. The steamers of the Pacific Steam 
Navigation Co. (owned by the Eoyal Mail Line) call at regular inter- 
vals, but the service is very deficient. These boats are permitted to 
call at all ports and to do a coastwise trade. As a rule they are old 
and slow vessels and are charging to-day exorbitant rates. The Peru- 
vian steamship companies also call at Guayaquil, but they have no 
definite itinerary. Occasionally steamers going through the Panama 
Canal call at Guayaquil if they are given enough cargo. The entire 
service from Ecuadorean ports to Panama for transshipment and to 
New York and eventually to Europe is irregular, and for this reason 
shipments are uncertain. 

The Panama Eailroad steamship line receives cargo for Ecuador to 
be transshipped at Panama and also brings goods transferred at this 
port from the Pacific side steamers. It might be advisable that this 
company, which is owned exclusively by the American Government, 
extend its trips to Guayaquil at least, and if possible improve its 
service. Ecuador can produce a large quantity of fruit which could 
be handled if satisfactory refrigerating service be supplied. The 
United Fruit line also takes and brings cargo to and from Ecuador 
in the same manner as the American Government line, and no doubt 
it will extend its services to Ecuadorean ports in due time. 

We are informed that the Government of Ecuador is prepared to 
grant every facility to any steamship company which would estab- 
lish a regular line and charge reasonable rates. We understand that 
it would be possible to secure payment for transportation of mails, 
and that exemption of port charges can be secured also. 

Encouragement for the development of the service can only be 
given by Government assistance. It is not possible to foresee to 
what extent the business can grow at this time, as no one knows 
what can happen under the abnormal conditions of the world. But 
it can be more or less safely stated that the export products of 
Ecuador being salable in times of war the gross tonnage of 100,000 
to 120,000 tons for exports can be maintained, and that imports for 
some 125,000 to 150,000 are more or less secured. 



GROUP CONFERENCE EEPOETS ECUADOR. 411 

(b) Postal facilities can be improved by the extension of the postal 
money-order service, the reduction of postage, and the betterment of 
mail transportation. It seems that only one steamship company 
carries the mails between New York and Panama, where they are 
transshipped. This causes an unnecessary delay, which can be 
remedied by using all mail steamers both ways. 

TAX ON SALESMEN AND DUTY ON SAMPLES. 

The present tax in most Republics is so high that many manufac- 
turers are deterred from making experimental trips. It is suggested 
that if the charge were reduced to a reasonable sum and one pay- 
ment to cover all cities in the Eepublic, the additional number of 
travelers would more than make up the amount now collected 
from a few. 

TARIFF OR DUTY ON SAMPLES AND THE REMEDr SUGGESTED. 

The present plan of charging duty on such samples as boots and 
shoes, even where the duty is returned, is so unsatisfactory and 
expensive that manufacturers have found it necessary to destroy or 
mutilate many hundred dollars' worth of samples each year so 
that they may be entered duty free. They are thus put to large 
pecuniary loss and do not feel able to show as full a line of mer- 
chandise. For this loss to them the Eepublics get no compensating 
advantage; instead, the reverse. We would respectfully suggest as 
a remedy that each Eepublic allow salesmen to deposit with the 
customs authorities a bond issued by some reputable bonding com- 
pany in the United States, said bond to be a guaranty that the 
samples will be taken out of the Eepublic. Bond to be returned to 
the salesman without delay when such samples have been delivered 
to the customs for reshipment. 

GENERAL OBSERVATION. 

Due to misunderstandings that have existed in connection with 
certain enterprises that have been undertaken by individuals in Ecua- 
dor there has not been as cordial a desire on the part of the people of 
Ecuador and the United States to cooperate with each other as should 
be the case. A careful study of the facts leads this committee to 
believe that the two countries can work together to their mutual 
advantage if past unfortunate events can be forgotten, and it is our 
recommendation that every effort be made by the Governments of 
Ecuador and the United States to bring about the friendly feeling 
that we are confident can and should exist between the people of 
these two countries, and that once established should result in devel- 
oping trade and intercourse that would be of great value to both. 

Eespectfully submitted. 

J. Cueva Garcia, Chairman. 



GUATEMALA 



413 



GUATEMALA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference, 

Sir: The public revenues of Guatemala, which consist largely of 
duties on imports and an export duty on coffee, were somewhat 
affected by the war by reason of reduced imports and exports. The 
import duty on flour was abolished and that on other necessities was 
reduced. Steps were taken to keep down the ordinary expenditures 
of the Government by means of economy in administration and by 
limiting the expenditures for public buildings and public works. At 
the same time the Government purchased flour to be supplied to the 
poorer classes below cost, thereby increasing its expenditures. On 
the whole, the measures adopted to meet the situation were wisely 
conceived. 

While the European war at its outbreak caused a reduction in the 
demand for coffee and a consequent fall in price, yet since that time 
sales and prices have been restored almost to their normal levels. 
The prosperity of the country is greatly dependent on coffee, and 
little upon any other cause which the war might affect. The difficul- 
ties of the country which existed before the war are but slightly 
increased. While its external transactions are of course carried on in 
gold and the duties in part are imposed on a gold basis, yet the 
actual currency of the country is paper, consisting of notes of six 
banks of issue, the value of which varies widely, at present being 
about 5 per cent of its face value in gold. 

The Republic of Guatemala is not only in need of a reorganization 
of its monetary system, but the people of that country are in need 
of better credit facilities, both long and short time. By short-time 
credit is meant loans " from crop to crop," that being the usual 
credit extended in that country, and the crops affording the only 
method of liquidating advances. In this connection the following 
recommendation was unanimously adopted: 

The monetary system of Guatemala is in an unsatisfactory con- 
dition. It would be necessary to borrow $12,000,000 in gold to 
place and maintain the country on a gold standard. It is the sense 

415 



416 PAN AMERICAN FINANCIAL CONFERENCE. 

of the conferees that a loan of such proportions is well within the 
ability of Guatemala to pay, and can be raised in the United States 
if the Government of Guatemala will make application for a loan in 
this country under such conditions as will assure the payment of the 
principal and interest. 

It is believed by the conferees representing the United States that 
a fund of $10,000,000 gold can be raised by a syndicate in the United 
States for the purpose of providing Guatemala with the needed bank- 
ing facilities and enabling it to place and maintain itself on a gold 
standard, said fund to be administered as follows : 

The Eepublic of Guatemala would grant a perpetual charter for 
the National Bank of Guatemala, with contract that it would not 
grant for 50 years any other bank charter. 

It would have power to do all classes of financing, and would be 
the sole financial agent and depositary of the State. 

Capital and surplus $10,000,000 gold, weight and fineness^ to be 
furnished by a syndicate of which the bankers of Guatemala would 
be a part. 

The right to establish branches throughout the country, with 
obligation to maintain branches in all cities of 5,000 inhabitants or 
upward. 

It would loan the Government on its bonds $5,000,000, for the 
purpose of retiring present existing issue of paper money. 

It would be the sole bank of issue and fiscal agent for the Govern- 
ment. 

It would be authorized to issue $2 in currency for each dollar of 
gold or Government bonds ; currency redeemable in gold at face value 
on demand. 

It may increase its capital from time to time, all increases to be 
made in standard gold at par. 

Government revenues pledged for the payment of the interest. 

Default of interest would entitle the United States Government to 
take possession of customhouses and collect revenues. 

The conferees representing Guatemala agreed generally with the 
suggested plan, but expressed no opinio** as to the proportion of 
bank notes to gold and rejected the plan of securing the payment of 
interest in case of default, these being considered by them to be 
purely matters of policy to be determined by their Government. 

A branch of the United States bank, a bank controlled by United 
States capital, or a bank closely connected with a United States bank 
would be to the advantage of direct trade between Guatemala and 
the United States and would make " dollar exchange " more valuable 
and desirable. 

Conferees representing the United States believe that if such a 
bank were established in Guatemala it would also afford such accom- 
modations in the way of extended credit as to afford greater relief 
to producers. 



GROUP CONFERENCE REPORTS GUATEMALA. 417 

The following recommendation was unanimously adopted: 

TVe recommend to the conference that it express its hope that the 
Federal reserve banks may devote particular attention to promoting 
commercial relations between the American Republics; and that by 
the quotation of forward discount rates, by the establishment of 
bureaus or agencies or the performance of such other appropriate 
functions as the law permits the Federal reserve system may exercise 
its potent influence toward standardizing credits end facilitating the 
movement of imports and exports, thereby encouraging the invest- 
ment of United States banking and other capital wherever favorable 
opportunities offer. 

There are no governmental divisions of the country corresponding 
to the States of the United States. The cities, with the exception 
of the capital city of Guatemala, are of no great size. The city of 
Guatemala has a tramway system owned by American capital, which 
is at present equipped with horse, or rather mule, cars. There is a 
plan on foot now to modernize the system, but as it is owned by a 
large American syndicate the financing of the plan, if carried out, 
would probably be taken care of. Outside of the city of Guatemala 
there are no tramway systems, nor are any of the cities of Guatemala 
large enough to support one. A number of the municipalities own 
water works and markets, which have been or are being paid for by 
taxation, and in some cases temporary loans have been obtained from 
the local banks by the municipalities to make payments on such 
public works, these loans being repaid out of the proceeds of taxa- 
tion. The municipalities have no bonded indebtedness like cities in 
the United States, their debts being represented by these short-time 
loans. There are some opportunities for United States capital to 
finance public utilities in Guatemala. There is now under consid- 
eration a plan for constructing a new sewerage system in the city of 
Guatemala, and a plan for constructing an entirely new system of 
water works for the same city. The estimates for the former run 
over $1,000,000 gold and for the latter at least $1,500,000 gold. 
There are also possibilities for constructing electric lines for con- 
necting the city of Guatemala with several near-by towns and 
cities. 

The railways of Guatemala are practically all owned in the United 
States and constitute almost the only investments in Guatemala of 
people of that country. Investments of German capital to a large 
extent, probably in excess of 50,000,000 marks, have been made, 
principally in coffee growing, and English capital has been invested 
to a less extent in the same. 

The foreign business of Guatemala is financed principally by 
means of acceptances and bills of exchange, and this method has been 
found satisfactory, but an extension of such facilities would be 
98257°— 15 27 



418 PAN AMERICAN FINANCIAL CONFERENCE. 

greatly to the advantage of the country. Warehouse receipts are not 
used, as there are no warehouses under public ownership or regu- 
lation. 

The foreign trade of Guatemala is carried on with the United 
States to a considerable extent. Coffee, which comprises 80 per 
cent of its exports, is shipped principally to Europe. The quality 
of this coffee is excellent, and it brings a high price in the markets 
of Europe, and especially London, where the finest grade commands 
a very high price. There is no reason, however, why this coffee 
should not be sold more extensively to consumers in the United 
States of the better grades of coffee. 

Guatemala is a country of great natural resources and a good 
laboring class, and with intelligent cooperation a number of articles 
used in this country might be produced there. 

The following recommendations were unanimously adopted: 

Guatemala and of increasing the United States foreign trade with 
that country would be to have our manufacturers of agricultural 
implements ship machines for demonstrating purposes to different 
parts of the country, with their own demonstrators, and that the 
Government of Guatemala be requested to supervise these demon- 
strations in instructing the agriculturists of the country in proper 
methods of cultivating the land and using modern tools and ma- 
chinery. 

The resources of Guatemala in valuable woods need development. 
Transportation facilities necessary to bring the wood in the rough 
to mills is insufficient. It is recommended that the attention of 
American manufacturers of portable sawmills be called to this, in 
order that the wood may be cut at growth, thus reducing the ulti- 
mate cost of transportation to market. Improved sugar-cane milling 
machinery is also needed, and the attention of American manufac- 
turers of such machinery is also directed to this. 

That American manufacturers and exporters seeking an outlet in 
South and Central American countries for commodities intended 
for wide distribution be requested to put their wares in passages 
conforming to the transportation requirements of the country, so as 
to better meet the convenience of the peoples of those countries and 
popularize American commodities and manufactures. 

Over 55 per cent of Guatemala's imports are bought in the United 
States, and this amount could be largely increased by some effort on 
the part of our manufacturers and exporters. The conferees adopted 
in this connection the following recommendation : 

The American manufacturers and exporters be requested to estab- 
lish and maintain in Guatemala City a permanent exhibition of 
American commodities which are at present less well known than 
European wares. 

The committee reports that there is a stable republican form of 
government in Guatemala by which the laws are respected and en- 



GROUP CONFERENCE REPORTS GUATEMALA. 419 

forced, and that there has been no revolutionary movement in 17 
years ; that Guatemala has a good system of primary education sup- 
ported by the Government, with 1,820 schools, and attended by 63 per 
cent of the children of school age, there being an average of one 
school to each thousand inhabitants ; that the teaching of English is 
compulsory in the schools, and proficiency in this language is a 
prerequisite to the degree of bachelor of arts ; that the public health 
is protected by a national board of health, under whose direction 
epidemics have been entirely stamped out by means of vaccination 
and other preventives and remedies. 

The following recommendations were also adopted : 

That the conference recommends the early establishment of a uni- 
form postal system between all of the countries of the American 
continents. 

That the conference advises that there be adopted a uniform classi- 
fication of all articles subject to customs duties among the different 
nations of the American continents. 

That the conference recommends that American merchants be re- 
quested to grant their Latin-American clients a credit of not less than 
90 days' sight for the payment of their purchases. 

That the conference recommends the designation of agents to Latin- 
American countries who shall know not only how to present their 
wares, but who shall also pay especial attention to the characteristics 
of their Latin- American clientele, in order that its needs may be 
learned with a view to fostering business intercourse with American 
merchants. 

That universities, high schools, and business colleges of the United 
States be asked to grant facilities to young men chosen from amongst 
the most promising in Latin- American schools of secondary instruc- 
tion, or from the graduates of colleges, so that they may be sent to 
study business courses, political economy, finance, and other branches 
connected with or related thereto. These students on the conclusion 
of their courses in the United States to return to their respective 
countries in order that the ideas, experience, and knowledge they 
have acquired may be utilized. 

That Latin- American countries be urged to devote attention to 
the study of political economy, business courses, finance, etc., in- 
creasing the scope of the said studies and making them compulsory 
in universities and colleges, the rudiments to be imparted in primary 
and high schools. 

That the respective Governments afford the necessary facilities for 
an interchange of professors and students from the countries of the 
three Americas, with a view to furthering their mutual acquaintance 
and increasing scientific intercourse in commerce, banking, etc. 
These professors would devote themselves to the diffusion of these 
ideas by means of lectures, preferably. 

That Spanish be taught in all schools, colleges, and universities in 
the United States, in order that a greater number of men, competent 
to develop the commercial intercourse of Latin America, may be 
trained. 



420 PAN AMERICAN FINANCIAL CONFERENCE. 

That greater attention be paid to the study of the geography, his- 
tory, and general conditions of Latin- American countries, so that a 
clearer conception of their resources may be gained. 

That chambers of commerce be established throughout the coun- 
tries of this continent, which, owing to their peculiar knowledge of the 
banking and business conditions, are in a position to furnish all data 
regarding business and industrial conditions to persons soliciting 
such. 

That, so far as possible, steps be taken to improve means of trans- 
portation along the Pacific coast, and that vessels stop at all im- 
portant ports, both in Latin America and the United States ; and if 
private enterprise fail to provide the necessary means of marine 
transportation for interchange of the field and factory products of 
the United States and Central American countries, the respective 
Governments aid in providing such necessary marine transportation. 

The appointment, in addition to the committee named to carry out 
the resolutions adopted by the conference, of the members of each 
delegation as a consulting committee of each country, so that all sub- 
sequent data on finance to be published later by the respective coun- 
tries may be given these committees, and in order that should the 
central committee deem it wise the various matters be referred to 
the different countries. 

In the belief that a larger comity between Guatemala and the 
United States can be greatly enhanced by an improved banking sys- 
tem in the former country, and that the cordial cooperation shown 
in the Guatemala group conference by the representatives of the 
two Governments in the discussion of some banking system of mutual 
interest to the two Governments can lead to the establishment in 
Guatemala of such a banking system, after due and adequate study 
of local conditions by some representative from the United States 
now in attendance upon the Guatemala group conference, it is the 
sense of this conference that Hon. David E. Francis, of St. Louis, 
Mo., be requested by the Government of the United States to visit 
Guatemala for this purpose as honorary commissioner; and acting 
further in cooperation with Dr. Victor Sanchez Ocana, Dr. Carlos 
Herrera, and Dr. Juan S. Lara, of the Guatemalan delegation, that 
he be requested to report to his Government such information as may 
permit speedy and fruitful results through the establishment in 
Guatemala by American financial aid of banking facilities adequate 
to the mutual needs of the two countries. 

Respectfully submitted. 

Victor Sanchez Ocana, Chairman. 



HONDURAS 



421 



HONDURAS. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir : The delegates from Honduras, at the suggestion of the dele- 
gates from the United States, prepared a report as to the conditions 
in and the needs of Honduras, following in their report the recom- 
mendations of the honorable Secretary of the Treasury as to the sub- 
jects to be considered by the different group committees. Your con- 
ference committee has therefore interwoven with portions of this 
very comprehensive report of the Honduras delegates its recom- 
mendations for the consideration of the financial conference, and has 
the honor, therefore, to report the following outline of conditions 
at present existing in Honduras, with suggestions for the develop- 
ment of the natural resources of that country which might prove to 
the mutual advantage of Honduras and. the United States if these 
could be brought about by cooperation. 

I. Public finance. 

(a) Public revenues and expenditures as affected by recent 

events in Europe. 
(5) Measures adopted to meet the situation. 

(c) Proposed remedies. 

(d) Possibilities of international cooperation. 

The condition of the internal public finances of Honduras at the 
beginning of the European war was a very favorable one. Due to 
the efficient collection of fiscal resources the actual were larger than 
the estimated receipts and far greater than the actual expenditure. 
The Government applied large amounts of the surplus for the repair 
of the cart road leading from the capital to the south coast and the 
port of Amapala and to the improvement of the roadbed and the 
changing of rolling stock of the railroad from La Pimienta to 
Puerto Cortez, on the Atlantic coast of Honduras. Furthermore, 
it started works for the supplying of places of recreation and the 
beautifying of the capital of the Republic. 

423 



424 PAN AMERICAN FINANCIAL CONFERENCE. 

The prolonged drought of the past two years resulted in short crops 
and has affected the towns of the center and south of the Eepublic. 
This has been a calamity perhaps greater for Honduras than the Eu- 
ropean war, and the Government, in order to forestall a deficiency in 
its budget and avoid the raising of additional taxes from new 
sources, has imposed upon itself rigorous economies in its expendi- 
tures, excepting those absolutely necessary for the proper public ad- 
ministration. 

II. The monetary situation. 

(a) Condition prior to outbreak of the European war. 

(h) Effects of the war. 

(c) Possibilities of international cooperation. 

(d) Outlook for uniform monetary standards. 

The silver peso, 25 grams, 900 fine (approximate present value 36.15 
cents in gold) is the monetary standard, and this circulating medium 
is abundant on the market. It is supplemented by the notes of private 
bankers. There is some scarcity of bank notes, necessitating transfer 
from town to town, but as this monetary question is purely an in- 
ternal one, we do not think it necessary to consider it here. 

III. The present banking situation. 

(a) Conditions existing prior and subsequent to the outbreak of 

the European war. 

(b) The establishment of branch banks and direct exchange. 

(c) Possibilities of further international cooperation. 

The banks of Honduras are the Banco de Honduras and the Banco 
de Comercio at the capital and the Banco Atlantida at Ceiba, on the 
Atlantic coast. 

The operations of these banks are confined to mortgages and short- 
time loans, at rates of interest of from 10 to 12 per cent per annum, 
and to a small extent to the sale and purchase of exchange on foreign 
countries. 

While commercial intercourse between Honduras and the United 
States could be benefited by the investment of American capital in 
local banking institutions and the establishment of branches by 
United States banks as now authorized under the Federal banking 
laws, we do not think this step immediately necessary, for we are of 
the opinion that if the banks now located in Honduras will make the 
effort satisfactory credits can be established with banks in the United 
States to adequately handle the business carried on between the two 
countries. 

The establishment of the gold standard in Honduras would be a 
very desirable reform. It is not probable that this could be carried 



GROUP CONFERENCE REPORTS HONDURAS. 425 

out until the country's external debt, now in default, has been ad- 
justed. We would, however, recommend a careful study, by the Hon- 
duras authorities of the Argentine conversion law, No. 3871, of 
November 4, 1899, eminently successful in that country after actual 
experience. This law had the effect of giving the country a prac- 
tical, stable paper currency many years before it had accumulated 
sufficient gold to make actual conversion of the currency possible. 

IV. The financing of public improvements. 

(a) The underwriting of national loans. 

(b) The underwriting of provincial or State loans. 

(c) The underwriting of municipal loans. 

(d) The relation of public credit to a well- organized system of 

taxation and balanced budget. 

According to the message of the President to Congress in the pres- 
ent year the interior debt of the Republic amounted, on July 31, 
1914, to 4,611,464.68 pesos. This debt has accumulated from old loans 
made to the Government for deferred payments and from losses 
caused by revolutions. The annual budget of expenditures sets aside 
each year a large sum for the amortization of this debt, and the sur- 
plus over expenditures has also been applied to the extinction of the 
interior debt. In the last fiscal year the debt was reduced from 
5,747,743.51 pesos to the figure mentioned above. 

Data submitted to this committee indicates that the surplus reve- 
nues of the Republic have been devoted for two successive years to 
the reduction of the country's internal debt, the reduction effected 
the last fiscal year, ending July 31, amounting to over 3*1,000,000, or 
nearly 20 per cent of the total internal debt. 

There is a heavy external debt weighing upon the credit of the 
Republic. This consists principally of bonds issued for the con- 
struction of the railway from Puerto Cortez to La Pimienta and 
the arrears of interest thereon. The British Council for Foreign 
Bondholders represents the holders of these bonds. 

For details covering the external debt of Honduras we would 
refer to the volume entitled " Morgan-Honduras Loan," by Juan E. 
Paredes (on file in the Pan American Union Library, Washington), 
also to " The Railways of South and Central America," by Halsey, 
1914 edition. 

However, transportation is one of the first essentials to the de- 
velopment of Honduras, and while the natural resources offer an 
encouraging basis to start from, yet the present condition of the 
country's foreign debt and limited income makes it of prime 
importance that they determine first what settlement can be made 
with the holders of the mortgage bonds on the railroad built from 



426 PAN AMERICAN FINANCIAL CONFERENCE. 

Puerto Cortez to La Pimienta before negotiations are entered into 
looking to the interesting of foreign capital. 

At present a surcharge amounting to 5 per cent in gold is imposed 
upon all importations in excess of existing duties collected in silver. 
The delegates representing the Government of Honduras indicate 
that if necessary this surcharge could be increased to 10 per cent, 
and the amount of revenues thereby produced applied toward 
amortizing the amount of external loan required for adjustment of 
the existing defaulted external debt. 

They also state that the Government at present collects a tax of 3 
centavos silver export duty levied upon each bunch of bananas ex- 
ported, or the equivalent of 1J cents gold. It is suggested that this 
export tax could be increased to gross 2 cents gold per bunch, and the 
proceeds thereof likewise applied toward amortizing the external 
loan. These duties could, if necessary, be collected under supervision 
of nominees of the bondholders or be deposited as directed by them. 

The total amount of revenues from these sources it is estimated 
would be $410,000 gold per annum. The delegates indicate that the 
Government would guarantee a minimum of $400,000 from these 
sources for the discharge of an external debt, and that the total 
amount so collected would be applied to that purpose. 

V. The financing of private enterprises. 

(a) The present needs of public-service companies, such as rail- 
roads, electric light, gas, and power companies. 
(h) The needs of merchants and manufacturers. 

(c) The financing of seasonable crops. 

(d) The consideration of plans to secure a more satisfactory 

status for collateral as security for commodity loans. 

(e) The possibility of securing greater uniformity in laws relat- 

ing to trade and commerce, in custom regulations, and the 
more effective protection of trade-marks. 
As to " &, e, and d" all of these have been covered in previous 
paragraphs of this report. 

(a) With reference to the present needs of public-service com- 
panies, the railroad enterprises established at the Atlantic coast of 
Honduras, which are those of Vacarro Bros. & Co.'s railroad at 
Ceiba and the Tela Kailroad Co. at Tela, both located in the Depart- 
ment of Atlantida, and the Trujillo Railroad at Trujillo, Department 
of Colon, are all enjoying ample franchises. The importation of the 
material for the construction and conservation of the railroads is 
exempt from all fiscal and municipal duties or taxes and extensive 
land grants and other valuable concessions have been given to these 
companies. 



GROUP CONFERENCE REPORTS HONDURAS. 427 

At present there are no gas companies nor street railways in the 
Republic, and electric lighting undertakings exist only in Teguci- 
galpa, San Pedro Sula, and Ceiba. Electric lighting has been pro- 
posed for other cities, but has not yet been carried out. We think 
that these public utilities will be provided for by local or foreign 
capital after the country has begun to show the development ex- 
pected from the completion of the railway to Tegucigalpa. 

We recommend that the questions of laws and regulations govern- 
ing trade-marks, banking, securities, commercial contracts, negotiable 
instruments, and also the dispatch of goods through the customhouse 
should be left to the general committee on uniformity of laws. We 
would, however, suggest the importance of giving due consideration 
to administrative regulations affecting all of these matters, particu- 
larly customhouse procedure, as well as to the actual statutes, as it is 
usually the great variation in port and customhouse regulations 
which makes importation and exportation complicated. 

The Honduras Government would gladly cooperate with other 
Latin American countries in adopting uniform laws and regulations. 

The principal sources of Government revenue are the import and 
export duties and the Government monopoly of rum made from 
sugar cane. The Government has a monopoly on the selling of pow- 
der, but this is purely for the purpose of controlling the sale for 
reasons of public safety. 

VI. Extension of inter-american markets. 

(a) Long-term credits as a means of stimulating inter- American 

trade. 
(£) Acceptances and discounts (including warehouse receipts) 

as a means of extending inter- American trade. 
(<?) The establishment of direct exchange (often referred to as 

dollar exchange) as a means of extending American trade. 

(d) The adaptation of the manufactured products of the United 

States to the needs of the nations of Central and South 
America. 

(e) Tariff laws as affecting trade with the United States. 

Commerce with the United States would be materially increased 
if the merchants and manufacturers of North America will make a 
careful study of the mercantile needs of Honduras and conform with 
the wishes of the buyers as to the style of wares offered and methods 
of packing. Proper packing is most essential in order to meet the 
duty exactions as well as to insure safe delivery when merchandise 
is consigned to parts of the country where transportation is difficult. 



428 PAN AMERICAN FINANCIAL CONFERENCE. 

While price is the chief consideration in relation to merchandise 
shipped to the coast region, it is very necessary to grant long-term 
credits (three to six months) to merchants in the interior who are 
subject to long delays in the receipt of their merchandise. It is our 
opinion that this can be covered by commercial letters of credit with 
the banks of the United States. 

The exportation of cattle from Honduras would be a most valu- 
able aid to the country by increasing their export trade about $1,000,- 
000. At the present time stringent quarantine regulations of the 
United States prevent this importation, due to the existence of wood 
tick. Inasmuch as it is felt that the establishment of dipping vats at 
the point of embarkation would eradicate this evil, it is strongly 
urged by this committee that this matter be properly brought to the 
attention of the health authorities of the United States, with a view 
of aiding the Honduran exporters of cattle. 

VII. Merchant marine and improved transportation facilities. 

(a) Increased and improved ocean transportation facilities. 

1. The present needs in this respect. 

2. Statement of shipping facilities now enjoyed. 

3. Suggestion as to the best means of securing improved 

transportation service. 

4. What public or private encouragement for improved 

transportation facilities can be expected from the 
countries represented at the conference? 
(h) Improved postal facilities (including money orders) and 
parcel post. 

The improvement of ocean transportation facilities is of great 
importance. The only line of steamships at present serving the 
Pacific coast of Honduras is the Pacific Mail Steamship Co. We be- 
lieve that the development expected from the completion of the rail- 
way to Tegucigalpa will necessitate the provision of better steamship 
facilities. 

The Government of Honduras would give liberal subventions to a 
company that would obligate itself to send its steamers to Amapala 
at least every ten days, such a service to extend as far as Balboa on 
the south and San Francisco on the north. 

The internal postal service, including that for money orders and 
parcels or parcel post, is completely attended to in Honduras, and 
this postal service has been improved on the south coast route. The 
mail is carried on motor trucks, for which contracts for the carrying 
of this mail have been let by the Government. 

In conclusion, we beg to emphasize the suggestion already voiced 
by the Argentine delegation for the establishment of a permanent 
Pan American board of arbitration. The purpose and power of such 



GROUP CONFERENCE REPORTS HONDURAS. 429 

a board must enable it to act with full authority as mediator and final 
court in the settlement of all commercial disputes that may arise be- 
tween the citizens of any country and the Government of another, 
or between citizens of two countries. Adequate executive authority 
must be provided for the enforcement of the decisions of this board 
of arbitration. In our judgment nothing will do more to stabilize 
credits, encourage the investment of foreign capital, and stimulate 
the desire for cooperation between the Pan American countries than 
the carrying out of the Argentine proposal. 

The undersigned committee unanimously submits this report to 
the Pan American Financial Conference and recommends that it be 
referred for further consideration and action to whatever body is 
created for the purpose of giving effect to the proceedings of this 
conference. 

Eespectf ully submitted. 

Leopold© Cordova, Chairman, 



NICARAGUA 



431 



NICARAGUA. 



(HtOUP CONFERENCE COMMITTEE REPO&T. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir: After careful, consideration of the explanation of existing 
conditions in the Republic of Nicaragua with reference to transpor- 
tation, banking, indebtedness, and resources, as submitted by the 
chairman, Dr. Pedro Rafel Cuadra, and fully confirmed by Gen. 
Emiliano Chamorro, Minister from Nicaragua to the United States, 
Mr. Clifford D. Ham, Collector General of Customs of Nicaragua, 
and the Hon. Arthur R. Thompson, a member of the Nicaraguan 
Mixed Claims Commission, and from other well-informed sources, 
the committee arrived at the following conclusions, which it desires 
to submit as its report to the General Conference : 

1. That the present Government of the Republic of Nicaragua- is 
stable in character and is being patriotically administered with due 
regard for the welfare of its citizens and the upbuilding and develop- 
ment of the country, affording at the same time proper protection for 
life and property and for the investment of outside capital. 

2. That the natural resources of Nicaragua are almost unlimited 
in extent and of the greatest diversity, due to the variety of soil, cli- 
mate, and altitude. The lands in the various sections are adapted to 
the cultivation of coffee, cacao, bananas, coconuts, pineapples and 
citrus fruits, tobacco, sugar, cotton, and rubber, the success of which 
has been practically demonstrated, but in a crude and limited man- 
ner, and which, with adequate transportation facilities, can readily 
attain increased proportions and find ready markets at home, in ad- 
jacent, and in foreign countries. 

3. Vast areas are especially adapted to the raising of cattle and 
other varieties of live stock, being covered throughout the year with 
natural grasses of remarkably high food value, well watered by 
perennial streams, and now supporting large herds of cattle, but 
which industry likewise suffers for transportation and marketing 
facilities. 

4. Nicaragua geologically is analogous to the State of Nevada, 
and a large portion of the mountainous section is highly mineralized, 
producing both gold and silver in paying quantities, though operated 
at this time in the crudest possible manner and under extraordinary 
difficulties of transportation. 

5. An extensive area is heavily wooded with primeval forests of 
mahogany, cedar, and other valuable hardwoods, pine, and dye- 
woods, but this industry is so little developed that merchantable 

9S2.j7°— 15 28 433 



434 PAN AMERICAN FINANCIAL CONFERENCE. 

lumber is actually imported into portions of the country from the 
Gulf ports of the United States. .All of these natural resources are 
suffering primarily from insufficient capital necessary to their 
proper development and from lack of adequate transportation fa- 
cilities, both from the interior to the ports and from the ports to the 
outside markets of the world. The need of additional transportation 
facilities is emphasized by the fact that inhabitants of the one 
coast are under the necessity of importing articles from the United 
States and other countries which are produced by and exported 
from the other coast, though the two are only separated by a dis- 
tance of approximately 200 miles. In view of the impera- 
tive necessity of improved shipping facilities, more acutely felt in 
Nicaragua than in most other countries, the transportation commit- 
tee of this conference is urgently requested to give due consideration 
to the needs of Nicaragua in this respect in conjunction with similar 
requirements of the other American Eepublics. 

From all of the foregoing it is evident that the Eepublic of Nica- 
ragua affords to capital extraordinary opportunities for profitable 
investment, both upon a large and small scale, and in view of the 
growing sentiment prevailing in the United States in favor of the 
cultivation of more intimate commercial and financial relations 
with all of the Eepublics of the Western Hemisphere, it is reasonable 
to expect that such capital can be secured. In this connection the 
committee has received full information concerning the proposed 
treaty between the Eepublic of Nicaragua and the United States, 
and it believes that the ratification of this treaty will inure to the 
decided advantage of both countries parties thereto, not only in aid- 
ing the development of Nicaragua, but in encouraging the invest- 
ment of capital therein by insuring a continuation of present stable 
and peaceful conditions. 

Appreciating the desirability of providing additional banking 
facilities, having American affiliations, not only in Central and South 
America, but in all of the countries with which we desire to promote 
more intimate commercial relations, it is recommended that the 
national banking laws of the United States be so amended as to 
permit national banks to subscribe to the stock of banks organized to 
do business in other countries up to a certain limited specified amount, 
thereby enabling banks, particularly those having less than $1,000,000 
of capital, to become interested in foreign banks. 

This committee acknowledges its high appreciation of the natural 
and potential possibilities of Nicaragua, and recommends most 
earnestly the prompt and full cooperation of the people of the 
United States in developing the resources of our sister Eepublic, 
lying as it does in close proximity to our Gulf ports and immedi- 
ately adjacent to the great Panama Canal, to the mutual benefit of 
the people of both countries. 

Respectfully submitted. 

Pedro Rafael Cttadra, Chairman. 



PANAMA 



435 



PANAMA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir: Your committee makes the following suggestions: 

1. In regard to the commissaries established in the Canal Zone: 

(a) Provide that the coupon books now issued by the Panama 
Canal or the Panama Railroad Co. to employees and servants of the 
United States Government or Panama Railroad may be used to 
purchase commodities from the merchants and manufacturers en- 
gaged in business in the Republic of Panama and the Canal Zone and 
be redeemable in cash at par, when presented by any duly estab- 
lished bank, merchant, or dealer in the Republic of Panama or the 
Canal Zone. 

(b) Abolish the established practice of commissaries owned di- 
rectly or indirectly by the United States in selling to ships which 
call at the ports of or pass through the Panama Canal all classes of 
provisions and supplies, excepting coal, oil, water, cold-storage 
goods, and other supplies or services not procurable in the Republic 
of Panama or the Canal Zone : Provided, however, That this regula- 
tion shall not apply to ships owned by the Government of the United 
States. 

2. In regard to transportation : 

(a) Respectfully request that the discriminatory freight rates by 
sea and land established by the Panama Railroad Co. to the detri- 
ment of commercial interests in the Republic of Panama be abolished. 

(b) To permit the use of the canal, subject to canal regulations 
and tolls, to merchant ships or other vessels desiring to use it for 
transportation purposes between the ports of Panama and Colon. 

banking. 

We earnestly recommend to the Federal Reserve Board to issue 
an order permitting each of the Federal reserve banks in the Federal 
Reserve System to open branch banks in North, South, and Central 
America (outside the United States) whenever the management of 
the respective Federal reserve banks feel warranted to do so. 

437 



438 PAN AMERICAN FINANCIAL CONFERENCE. 

SHIPPING FACILITIES. 

Becognizing, as we do, that clearer understanding, mutual interest, 
and better trade can be accomplished only by adequate means of 
communication, we believe that better shipping facilities between 
North, Central, and South America should be developed and that 
any present legal obstacles to this end should be withdrawn. 

Believing that the best way to create a market for any commodity 
is to trade in it, we recommend that this conference strongly urge 
that all merchants in the United States selling goods in Central or 
South America quote prices and draw their covering drafts in 
United States of North America dollars, and that all banks and 
bankers issuing commercial credits or selling exchange on these 
countries employ the same medium, so far as practicable. 

Eespectfully submitted. 

Aristides Arjona, Chairman, 



PARAGUAY 



439 



PARAGUAY. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir : The group committee appointed to consider the financial and 
commercial conditions in Paraguay begs to make the following 
report : 

The revenues of Paraguay have been considerably diminished by 
reason of the war and that in consequence thereof the Government 
has taken stringent measures to reduce its budget by the suspension 
of divers public improvements and by other economies until more 
favorable circumstances develop. 

In respect to the internal money situation, we understand that 
the paper money has largely depreciated in value, and the supply 
of gold is very limited. We believe that the adoption of a uniform 
money standard for all of the American Republics would result in 
stabilizing the currency of the different countries and facilitating 
international banking and commercial transactions. 

In respect to the local banking facilities, we believe that the grad- 
ual establishment of branches by banks of the United States in south- 
ern Republics would strengthen and increase commercial dealings 
between the United States and the different countries, although at 
present in Paraguay there may not be sufficient business to justify 
such branch banks at this time ; but the extension of American mar- 
kets and the establishment of dollar exchange between the Americas 
can be greatly promoted, in our opinion, by a gradual establishment 
of adequate banking facilities by the banks of the United States in 
Central and South American countries. 

The steady development of Paraguay's resources requires foreign 
capital which, at least while the European war continues, is not ob- 
tainable in the European money market. It is apparent that judi- 
cious investment of United States capital would be a powerful aid to 
the export of United States products by expanding the wealth and 
purchasing power of Paraguay. 

441 



442 PAN AMERICAN FINANCIAL CONFERENCE. 

In the promotion of trade with, the southern Republics, the estab- 
lishment of a system of obtaining information regarding the financial 
and business standing of the merchants of those countries would be 
very helpful and soon lead to the extension of suitable credit terms to 
said merchants. We also believe that the establishment of some sys- 
tem of arbitration of commercial disputes between all of the countries 
of America would strengthen and increase international trade and 
mutual understanding, and we are led to believe that Paraguay will 
be glad to cooperate with the other Central and South American 
countries and with the United States in bringing about the estab- 
lishment of such a system. 

In respect to merchant marine and improved transportation facili- 
ties between the Americas, we believe that this subject overshadows 
all others in its importance, and it is the sense of this committee 
that adequate transportation facilities are highly essential in the 
social and commercial intercourse between the peoples of Paraguay 
and other American Bepublics. We hope and believe that the com- 
mittee on transportation appointed by the honorable chairman of 
the conference will satisfactorily solve the problem. 

From the information received and investigations made we feel 
Paraguay has great possibilities and that in the future considerable 
trade might be developed between this country and the United 
States. It has unlimited mineral, timber, and agricultural resources 
hardly touched, and the development of these resources in the future 
will bring about splendid opportunity for the interchange of the 
products of the United States and this growing country of South 
America. And we recommend that the members of this group com- 
mittee from the United States as well as the members, from Para- 
guay use their best efforts in disseminating the information they 
have received in regard to Paraguay and the United States through- 
out the various parts of their respective countries looking to in- 
creased trade between the United States and Paraguay. 

We also wish to express our sincere appreciation of the invitation 
given by Secretary of the Treasury McAdoo to the business men 
and bankers of the United States to come in touch with the delegates 
from the Central and South American countries, looking to the pro- 
motion of closer relationships between these countries and the devel- 
opment of our international commerce. We hope and believe that 
this conference will result in much good to all the countries repre- 
sented at the conference, and we feel that it will bring about closer 
friendships and commercial relationships between all the American 
Republics. 

Respectfully submitted. 

H. Velazquez, Chairman. 



PERU 



443 



PERU- 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir: The committee having before it the data contained in the 
memorandum submitted by the Peruvian delegation, took up in order 
the questions suggested by the Secretary of the Treasury for the con- 
sideration of group committees, and begs to submit the following 
resolutions as a result of its deliberations: 

1. Resolved, That the Peruvian committee favors the establish- 
ment in Peru of branches of American banks which will bring capi- 
tal into the country to facilitate commerce and industry, without 
prejudice, however, to the development of closer relations between 
established local financial institutions in Peru with financial institu- 
tions in the United States, which will tend to bring into more inti- 
mate and friendly contact the financial interests and sentiments be- 
tween the respective countries. 

2. Resolved, That the Peruvian committee recommends such steps 
on the part of financial interests in the United States as will favor 
and facilitate the placement of South American loans in the financial 
markets of the United States. 

3. Resolved, That the Peruvian committee favors greater uniform- 
ity in laws relating to trade and commerce and in customs regula- 
tions and more effective protection of trade-marks, and recommends 
these subjects to the earnest attention of the special committee ap- 
pointed for the purpose. 

4. Resolved,, That the financial institutions in the United States 
should adopt the method commonly employed by similar institutions 
in Europe, more particularly in England and Germany, whereby 
resources are placed at the disposal of foreign commerce. In the 
main the European system provides for the discount of long-term 
bills drawn by manufacturers on the export merchants. This sys- 
tem should extend to drafts of manufacturers on foreign clients and 
to drafts of the commission merchants on their foreign clients, as 
well as to drafts of manufacturers, export merchants, and commis- 
sion merchants made upon the local banks. 

5. Resolved, That inter- American commerce will be aided by the 
establishment of bonded warehouses in the several countries, whose 
receipts or warrants will be accepted by banks as security for loans. 

445 



446 PAN AMERICAN FINANCIAL CONFERENCE. 

6. Resolved, That every effort should be made by financial and 
commercial interests to establish exchange between the American 
countries on the dollar basis. 

7. Resolved, That the Peruvian committee earnestly favor the 
appointment of an international commission, for the purpose of 
devising a plan that will effect uniformity in the classification of 
commodities for custom purposes and to unify, as far as possible, 
port charges and regulations. 

8. Resolved, That inasmuch as the subject of a merchant marine 
and improved transportation facilities has been referred to a special 
committee of the financial conference, the Peruvian committee deems 
it sufficient to record its opinions in favor of the large development 
of transportation facilities between the United States and Peru. 

9. Resolved, That the Peruvian committee strongly indorses the 
principle of international commercial arbitration to settle business 
disputes. 

10. Resolved, That pure food and drug laws should be adopted by 
the Pan-American countries, applicable to their exports as well as 
to local consumption, in order to protect foreign consumer in the 
same degree as the domestic consumer is protected against impure 
food and drugs. 

The Peruvian committee takes the opportunity to express its 
appreciation and approval of the motive prompting the calling of 
the Pan-American Financial Conference, and of the plan adopted 
of separate group committees to discuss the special needs and con- 
ditions of the different countries, which leads to more thorough 
knowledge of the matter affecting the separate localities, and it be- 
lieves that similar conferences should be of periodical occurrence. 

Eespectfully submitted, 

Isaac Alzamora, Chairman. 



SALVADOR 



447 



SALVADOR, 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 

Sir: Your committee appointed to consider financial and commer- 
cial relations between the Republic of Salvador and the United 
States begs to present its report. This report is based upon a careful 
examination of such information as could be secured not only in 
general committee but in three subcommittees. The committee on 
banking problems comprised Dr. Alfonso Quifionez M., Mr. W. S. 
Howe, Mr. F. R. Curtiss, and Mr. H. G. P. Deans ; that on commerce 
consisted of Dr. R. Aguilar, Dr. W. P. Wilson, Mr. H. C. McQueen, 
and Mr. Elliott H. Goodwin ; while transportation problems were con- 
sidered by Dr. Jose E. Suay, Mr. E. C. Lufkin, Mr. J. H. Ardrey, and 
Mr. J. F. Nickerson. 

The conclusions arrived at in these subcommittees are herein 
brought together, and it is found that the principal needs of Salva- 
dor are: 

First. Additional banking capital as well as money for general 
development; and, 

Second. Better steamship and railway facilities. 

From information given us we are led to believe that the various 
other Central American Republics, as well as a number of countries 
farther south, also require similar banking facilities, if trade rela- 
tions with the United States are to be developed. This leads to the 
suggestion that consideration be given to the organization and estab- 
lishment of a bank with branches* in all the different countries inter- 
ested upon the granting by them of such facilities for business ay 
are fair and desirable. We would suggest that subscriptions to the 
shares, as well as membership in the directorate, be made permissible 
to the citizens of all countries in which branches are established, this 
proposed bank and its branches to have such authority as would 
enable it to further the commercial, agricultural, and industrial devel- 
opment of the countries, as well as their commercial relations with 
the United States, and to take care of their short-time credits. 
98257°— 15 29 449 



450 PAN AMERICAN" FINANCIAL CONFERENCE. 

In our opinion, in addition to the foregoing suggestions, these 
objects would be better accomplished if a separate corporation were 
to be organized, not for the purpose of receiving deposits, but with 
power to negotiate for and distribute Government loans and the 
securities issued by the various municipalities for public improve- 
ments and for the furtherance of water and rail communication 
between various countries. In order to procure the capital, adequate 
assurances of a permanent policy for the protection of such invest- 
ments should be forthcoming. 

We are convinced that any plan involving the establishment of 
individual banks in the separate Eepublics would not be as helpful 
to the development of trade between those countries as would the 
establishment of one large bank with branches, which we believe 
would give the best results. 

It is immediately apparent that in this way capital can be trans- 
ferred from one country to another, to be used at the time when 
the greatest amount of credit is needed for crop-maturing and crop- 
moving purposes, and that in this way earning power could be de- 
veloped much more rapidly. 

The handling of the question of rail and water transportation 
should be undertaken, in the first place, by private capital; but the 
second corporation, which is referred to above in this report, would 
doubtless be of great service in the handling and marketing and 
general distribution of the long-time securities, which would neces- 
sarily require a market. 

We realize that this broad plan would probably require time in its 
development; also that it would require the appointment of a pre- 
liminary commission which would meet with the leading men of these 
countries with the idea of securing the necessary legislation in all 
of them and with the further purpose of agreeing in a general way 
on such charter provisions for the proposed corporations as would 
most safely and satisfactorily develop the trade and commerce of all 
the countries interested. 

It is manifest that no general or individual plan for the establish- 
ment of a bank or banks can be accomplished without sufficient time 
for careful and thorough investigation of the different fields. In the 
meantime if loans are urgently required by any of the various Gov- 
ernments, it follows that these must necessarily be made the subject 
of individual negotiations with the bankers in the larger cities of 
the United States. 

Better transportation facilities from the interior of Salvador will 
soon be afforded by railways now under construction which will 
connect with existing railways and through them with the seaports. 
These facilities should be still further extended by the construction 



GKOUP CONFERENCE REPORTS SALVADOR. 451 

of highways, so that the products of the country can more readily 
reach the points from which they can be exported and so that imports 
can more cheaply and quickly reach the points of consumption. 

Better transportation by sea is greatly needed, so that mails, pas- 
sengers, and products can more regularly and speedily pass between 
Salvador and the United States. Such marine transportation will 
beyond doubt be afforded promptly whenever financial provisions 
have been perfected which will produce a stimulation of commerce, 
but pending such stimulation of commerce it is very important that 
inducements be offered for the maintenance of suitable ocean trans- 
portation. 

Salvador will gladly give all possible encouragement to the up- 
building of its transportation facilities, and if commerce between 
Salvador and the United States is to be developed the United States 
should, in such manner as may be possible, assist in this, one of the 
most important needs for the development and prosperity of Salvador. 

Finally, the subcommittee on commerce would venture to summa- 
rize certain specific conclusions in the following manner : 

First. This subcommittee calls attention to the lack of any com- 
mercial treaty between Salvador and the United States, and unites in 
a recommendation to the Governments of both countries that a com- 
mercial treaty containing concessions mutually and equally advan- 
tageous be negotiated with all possible dispatch. 

Second. The committee points to the lack of any chamber of com- 
merce or commercial organization in Salvador, and recommends the 
establishment of such a body to forward the commerce between the 
two countries through constant intercourse with chambers of com- 
merce in the United States. 

Third. The cooperation of the banking institutions in both coun- 
tries is earnestly solicited in the establishment of reasonable credits 
and the prompt furnishing of reliable credit information to those in 
each country desiring to trade with the other country. 

Fourth. In the furtherance of commercial relations between the 
two countries, the committee emphasizes the advantage of the estab- 
lishment of a plan for the exchange of students as well as of com- 
mercial and agricultural information, to be brought about through 
either the Governments or the chambers of commerce of the two 
countries. 

Respectfully submitted. 

Alfonso Quinonez M., Chairman. 



URUGUAY 



453 



URUGUAY. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir : The committee has adopted the following resolutions : 

I. Maritime transportation. 

Whereas it is absolutely essential to the development of the com- 
mercial relations between the American Kepublics that adequate 
transportation facilities be promoted : 

Resolved, That we favor the passage of laws tending to place the 
merchant marines of the American Republics on a basis of equality 
with that of all other countries by removing legal restrictions which 
may exist or granting direct or indirect subsidies, or both. 

II. System or weights and measures. 

Weights and measures in the American countries should be uni- 
form. The metrical system should be adopted, and until this has 
been done prices, invoices, and bills of lading should be made up in 
metrical unity. 

III. Communication by cable — How to render it more economical. 

It was suggested, and approved with unanimity, to recommend to 
the telegraphic companies to put their rates on a par with the Eu- 
ropean rates, that each Government seek to install a wireless system 
from country to country, and that they take up the question of 
lowering the tariff rates. 

IV. Monetary unity, exchanges, and arbitrages. 

Whereas it is desirable that exchange operations between the 
American Republics be simplified; that transactions between these 
countries be based upon a fixed gold standard of value; and that 
statistics be kept in uniform manner in the various Republics, 

Resolved, That we favor the adoption by the American Republics 
of an international monetary unit. 

455 



456 PAN AMERICAN FINANCIAL CONFERENCE. 

V. American banks. 

Resolved, That the conference declare that the countries of the 
American Eepublics should facilitate the relations of their repre- 
sentative banks for the discount of bills, movement of capital, fos- 
tering of trade and financial assistance of public works, and develop- 
ment of the wealth of the American Continent. 

VI. Commercial credit, sales, and time. 

Whereas it is essential to the proper development of commerce 
between the American Eepublics that adequate credit terms be 
granted by North American sellers to South and Central American 
purchasers; and 

Whereas such credit terms can be arranged only through the full- 
est cooperation on the part of such sellers and purchasers and their 
respective bankers; and 

Whereas it appears that best results can be obtained in many in- 
stances through practical cooperation on the part of the bankers of 
all the countries in the form of a division of the banking duties con- 
nected with such credit arrangements, the bankers of the North 
American seller furnishing the required capital and the bankers 
of the South and Central American purchaser furnishing the re- 
quired credit, 

Resolved, That this committee make the following recommenda- 
tions : 

(a) That North American banks recommend to their clients the 
granting of adequate credit terms in connection with the sale of 
merchandise to South and Central American merchants in all cases 
where proper information has been given or suitable credit arrange- 
ments have been made. 

(b) That North American banks discount freely at favorable rates 
drafts drawn at terms up to six months' sight by their clients cover- 
ing the exports of merchandise to South and Central America. 

(c) That South American and Central American banks explain to 
their clients the necessity of giving complete financial statements, 
including a copy of the balance sheet and profit and loss account in all 
cases where international credit is desired. 

(d) That in cases where such complete financial statements are 
unobtainable or where such statement does not show sufficient strength 
to warrant the extension of credit by an institution located in a dis- 
tant country, the South and Central American banks shall open cred- 
its in favor of such clients on such terms as will in effect furnish the 
credit to such clients while the North American bank shall furnish the 
capital by discounting drafts against such credits. 



GROUP CONFERENCE REPORTS URUGUAY. 457 

VTI. Postal union — Adhesion of the North American countries 
to the South American postal union in order to facilitate 
and cheapen mail service. 

Approved the following resolution and referred to the general com- 
mittee of the conference. 

Mail between the American Republics should be regulated by the 
prescriptions of the South American Postal Convention held in Mon- 
tevideo in 1911. 

VIII. Facilities through customhouses and in other ways for 

COMMERCIAL INTERCHANGE BETWEEN AMERICAN COUNTRIES. 

Resolved, That the conference declares there is positive advantage 
for the American Republics in establishing reciprocal tariff arrange- 
ments and if necessary provide other means which would contribute 
toward securing profitable markets for their excess of production. 

IX. Interchange of students in the higher business schools be- 
tween the American countries and establishment of mercan- 
tile MUSEUMS IN SUCH SCHOOLS. 

Resolved, That the conference strongly advocates the interchange 
of students and the establishment of a mercantile museum or perma- 
nent exposition of Pan American products among the countries of 
the American Continent. 

X. Necessity of diminishing imposts on the necessaries of life 

AND INCREASE OF THOSE REFERRING TO OTHER ARTICLES LAWS FOR 

PROGRESSrVE TAXES ON INHERITANCES AND ADOPTION OF INTERNA- 
TIONAL MEASURES IN ORDER TO OVERCOME FRAUD. 

Resolved, That answering the question put by letter D of the fourth 
division of questions suggested by the Secretary of the Treasury for 
the consideration of the group committees, the conference considers 
that it would be advantageous as the basis for a good taxing system to 
decrease the duties in the American Eepublics on the primary mate- 
rials and articles necessary to life, as, for example, food and clothing, 
etc., substituting them as far as possible with the increase of duties 
on superfluous articles for life and luxury directly applied or in the 
form of a State monopoly which will prevent fraud in collecting 
those taxes. It would also be advisable to legislate with regard to 
graduated taxes on the inheritance in order to prevent the transmis- 
sion of capital from one country to another with the purpose of de- 
frauding the collection of such taxes. 

The foregoing matter which constitutes one of the topics of the 
questions suggested by the Secretary of the Treasury for the con- 
sideration of the group committees of the conference was considered 
and unanimously approved. 



458 PAN AMERICAN FINANCIAL CONFERENCE. 

XI. EFFECTIVE PROTECTION OF TRADE- MARKS, ETC. 

Resolved: That, as provided for in the special convention on the 
subject in the Fourth Pan American Conference, that the most effec- 
tive enactments for the protection of trade-marks have been declared 
and been authorized by the American nations and as the said con- 
vention has been ratified by several nations, among whom is the 
United States, the ratification by those that have not heretofore 
recognized it is hereby recommended. 

The principles proclaimed at the South American International 
Congress of Montevideo (1888) were confirmed in the subsequent Pan 
American conferences which were held in Washington, Mexico, and 
Rio de Janeiro, and at the Fourth Pan American Conference of 
Buenos Aires (1910) and three treaties of the greatest importance were 
approved: One relative to literary and artistic copyrights, another 
regarding patents and inventions, drawings and industrial models, 
and another concerning trade-marks and commercial names for the 
purpose of guaranteeing the rights of authors, inventors, manufac- 
turers and merchants in all the countries of America, of facilitating 
the international use of inventions and of trade-marks giving them 
protection equal to that granted by any of the signatory nations. 

In 1909 Uruguay had amended its law of 1877 for the protection 
of trade-marks and commercial names ; had made it conform to the 
latest modifications accepted by previous European and American 
international conventions; and had definitely settled several of the 
most important problems on the ownership of trade-marks, effects 
of registration, the use of such marks, and the right of nullification 
in order to prevent violations of accredited marks in use, guarantees 
for foreign marks, and rights of the owners of the latter even when 
not registered. The legal procedure of Uruguay to prosecute the 
usurpers or defrauders is the most efficacious possible. 

In the convention signed in the Fourth Pan American Conference 
of Buenos Aires the principal provisions for the protection of trade- 
marks and commercial names were established in nineteen articles. 
The mere reading of that convention, so carefully written, shows that 
the most adequate measures have been adopted and that what is 
required is that the ratification *of that convention be continued by 
all the signatory nations. 

The United States has ratified this convention, as other countries 
of America have done. 

The first ten articles of the convention mentioned contain every- 
thing desirable for the complete protection of trade-marks and com- 
mercial names from an international point of view ; and if to this we 
add that the law of Uruguay of 1909 on this matter contains the 
most advanced and liberal measures, the Uruguayan Delegation 



GROUP CONFERENCE REPORTS URUGUAY. 459 

understands that the conference is sufficiently authorized to confirm 
once more the principles contained in the special convention of 
Buenos Aires, which, without clashing with the internal legislation 
of each country, proposed to render uniform, as far as possible, the 
national enactments in accordance with articles 11 and 13 of said 
convention, in order that such protection may be efficacious in all 
the countries forming the Pan American Union. 
Respectfully submitted. 

Pedro Cosio, Chairman. 



VENEZUELA 



461 



VENEZUELA. 



GROUP CONFERENCE REPORT. 



Hon. William G. McAdoo, Secretary of the Treasury, 

Chairman Pan American Financial Conference. 
Sir: The group conference committee, which was intrusted with 
the examination of the most suitable means of establishing closer 
commercial and financial relations between the Republic of Vene- 
zuela and the people of the United States of America, begs to inform 
the general conference that it has made a study of existing condi- 
tions, and in presenting this report divides it into several sections, 
treating them in the order of their importance. 

MERCHANT MARINE AND IMPROVED OCEAN TRANSPORTATION FACILITIES. 

We consider it of the greatest importance for the development of 
a more extended volume of business and commercial relations be- 
tween the United States and Venezuela that means of regular com- 
munication by steamships of ample tonnage be established. In 
order to accomplish this it is necessary that every encouragement be 
given by both the United States and the Venezuela Governments to 
any enterprise in this direction which may be adopted as a result 
of this Pan American Conference. These steamers should be built 
in such manner as to attract not only those interested in commercial 
affairs but also those of both countries who travel for pleasure. For 
only by assurance of speed, safety, and comfort can the great tide of 
travel be diverted from its tendency hitherto in the direction of 
European countries. Every North American visiting Venezuela and 
every South American visiting the United States becomes a mission- 
ary amongst his countrymen for continuous and increased inter- 
course, and all these visitors will be the means of promoting not 
only greater trade relations, but also closer social ties and better 
understanding in every respect. 

We are informed that the present time consumed by steamships of 

the Red D Line is from nine and one-half to ten days, distance 1,860 

miles, and that the accommodations are inferior to those sailing to 

European ports. 

463 



464 



PAIS" AMERICAN FINANCIAL CONFERENCE. 



We consider it of the utmost importance that our country, in re- 
gard to its communication with South and Central America, be in- 
dependent of all other countries, and that the development of this 
direct marine communication shall be free of any political influence, 
but considered only for the development of the great financial and 
commercial interests of these countries. 

Under normal conditions the volume of foreign trade in a given 
direction is in direct ratio with the steamship facilities, so states a 
report of January 16, 1915, of the American minister, the honorable 
Preston McGoodwin. As an illustration of this he states that from 
the port of Maracaibo, which is in direct and frequent steamship 
communication only with the United States, there is sent to that 
country over 63 per cent of its exports, and in return receives more 
than 42 per cent of its imports from the United States, notwithstand- 
ing the fact that nearly all the greatest commercial houses in that 
city belong to Europeans. 

IMPROVED POSTAL FACILITIES. 

The committee begs to call the attention of the general conference 
to the fact that while a parcel-post convention exists between the 
United States and Venezuela no money-order service exists. In our 
opinion, this should be remedied. 

SUMMARY OF FOREIGN TRADE OF VENEZUELA. 

The summary of the foreign trade for the years 1912-13 and 1913- 
14 was as follows : 



Imports and exports. 



1912-13 



1913-14 



Total imports 

Total exports 

IMPORTS. 

United States 

United Kingdom 

Germany 

Netherlands 

France 

Spain 

Italy 

EXPORTS 

United States 

France 

Germany 

United Kingdom 

Spain 

Netherlands 

Italy 



$19,667,457 


$17,005,503 


28,776,530 


26,323,823 


7,684,393 


6,158,122 


4,217,724 


4,260,390 


3,125,131 


2,407,672 


1,701,602 


1,728,243 


1,164,406 


1,110,960 


880,857 


566,858 


655,884 


535,638 


9,850,151 


8,611,924 


9,092,161 


8,430,421 


. 5,150,777 


4,162,088 


1,836,178 


1,862,850 


1,329,141 


1,272,556 


784,639 


828,868 


209, 146 


185,554 



It is evident from these statistics how large a portion of the 
imports into Venezuela are diverted to other countries outside of the 
United States, which is its nearest neighbor. In other words, in 
1913-14 the imports from the United States were approximately 
$6,000,000 as compared to $10,000,000 from other countries. 



GROUP CONFERENCE REPORTS VENEZUELA. 465 



THE EXTENSION OF INTER-AMERICAN MARKETS. 

In examining the lists of articles imported into Venezuela we find 
the United States does not lead in the exportation of agricultural 
implements, bags and baggings, coal, cotton goods and woolen goods, 
butter, cotton knit goods, hats, malt, and rice. With the unsurpassed 
resources for the manufacturing of agricultural implements, cotton 
goods, woolen goods, hats, etc., it is to be regretted that the United 
States has not had more success in the sale of these articles in Vene- 
zuela. The causes for this, however, are manifold, and should be 
removed by adapting the system of packing merchandise to meet the 
desires and uses of South American customers. The United States 
should also send trained representatives to Venezuela and other 
South American countries, who are thoroughly conversant with the 
language and familiar with the customs of the people. More sym- 
pathetic attention should be given to the reports of these representa- 
tives, for in this way each would become more intimately acquainted 
with the ideas and desires of the other and acquire the knowledge 
which is so necessary for the extension of trade. 

LICENSE TAXES. 

Commercial travelers from abroad are not subject to license taxes 
in Venezuela. Samples are allowed free of duty for a limited time, 
provided a sufficient security is furnished to guarantee the payment 
of the regular duties in case reexportation should not take place 
within a fixed period. 

CREDITS. 

The questions of credits will be a most important one in the estab- 
lishment of large commercial relations between the United States 
and Venezuela. It is hoped by this conference committee that in the 
course of time a system of dissemination in regard to the commercial 
practices prevalent in the United States will be brought to the 
knowledge of merchants in Venezuela, so that a larger volume of 
credit business may be established between the two countries. The 
conference understands fully that Venezuela being an agricultural 
country, the question of credits is an important one, and European 
countries familiar with these conditions have always been inclined 
to extend these credits. American merchants will no doubt be 
pleased to extend large and ample credit relations, provided all facts 
for passing these credits are freely tendered by those seeking such 
accommodations. In the opinion of this committee, banks in Vene- 
zuela, as well as in the United States, should cooperate in bringing 
about a full and increased development of commercial credit re- 
lations. 

98257°— 15 30 



466 PAN AMERICAN FINANCIAL CONFERENCE. 

INTERNATIONAL ARBITRATION COURTS. 

In developing business between Venezuela and the United States 
there will no doubt at some times be questions of disputes arising 
between the respective merchants which would require friendly 
arbitration. The committee therefore looks with favor upon the 
suggestion made by the Argentine Eepublic for the establishment of 
an international arbitration court providing for the settlement of 
commercial disputes in all the countries of North and South Amer- 
ica. This would greatly simplify the methods of business procedure 
between our respective countries. 

DISTRIBUTION OF NEWS THROUGH AMERICAN NEWSPAPERS. 

Confidence in South American Eepublics is growing because of 
the well-established governments which are now ruling the coun- 
tries. To build up strong and mutual trade relations it would be 
very desirable that the newspapers and periodicals of the United 
States, in the interest of justice to the people of South and Central 
America as well as to their readers in the United States, confine 
themselves to well- authenticated news reports rather than to erro- 
neous reports of disturbances, which so frequently appear in news 
columns and which are more frequently matters of imagination and 
cause an injurious effect on their mutual cordial relations. 

PUBLIC UTILITIES. 

It seems that a most promising field for immediate investigation 
is presented by the public utility companies which furnish electric 
light and power in the cities of South America. 

These companies have been founded on European capital, and their 
subsequent development and expansion have been carried on usually 
by issues of bonds placed in Europe. Capital from this source has 
been practically cut off. 

Bonds of this description are usually well protected by being con- 
stituted a lien on the property, by statutes limiting to a reasonable 
amount the issues, and by conservative amortization plans. 

A most important consideration in this connection is that the 
financing of such companies would constitute a very powerful aid to 
securing the permanent trade in their valuable machinery and sup- 
plies of all descriptions for the generation and transmission of elec- 
tric power and lighting. 

This committee is informed that there are two such companies in 
Venezuela. In the opinion of the committee American capital could 
be profitably invested in Venezuela to assist in carrying to comple- 
tion the works which have been recently suspended, and also to 
undertake new work of this description. 



GROUP CONFERENCE REPORTS — VENEZUELA. 467 

RAILROADS AND PUBLIC IMPROVEMENTS. 

The total railroad mileage of Venezuela is in the neighborhood of 
500 miles. The opportunities for an extension of a railroad system 
seem very great, for Venezuela is. a rich agricultural country. The 
area is approximately 400,000 square miles, the population approxi- 
mately 3,000,000. 

It is therefore the opinion of this conference committee that great 
efforts should be made for the development of the internal communi- 
cations of this rich agricultural country. 

We repeat in closing this argument that we regard it of the utmost 
importance that steamships be given first consideration in treating 
with this subject of increased relations. Trade will follow in a large 
measure increased steamship facilities. 

MONETARY SYSTEM OE VENEZUELA IS ESTABLISHED ON SOUND GOLD BASIS. 

Paper money not legal tender. — " Neither the legislative nor the 
executive power nor any authority of the Republic shall issue paper 
mone}' in any case or under any circumstances whatever, nor declare 
as legal tender any kind of bank notes nor any value represented on 
paper, nor allow the importation into Venezuela of any foreign or 
national currency but that of gold coins." (Handbook of Venezuela, 
1904, p. 439.) 

The banking facilities required to conduct proper business transac- 
tions will in due course of time, without doubt, be sufficiently fur- 
nished by the bankers of both countries. 

THE NATIONAL DEBT. 

The conference committee has heard with great pleasure from the 
representative from Venezuela as to the good condition of the country 
in regard to its national debt, which is as follows at the latest date. 1 

Debt : Bolivars. 2 

Internal 60, 244, 565. 89 

External 110, 987, 296. 77 

Summary of public debt : 
Internal debt — 

National consolidated internal debt, 6 per cent 40, 199. 59 

National consolidated internal debt, 3 per cent 59, 075, 925. 22 

National consolidated internal debt, no interest 1, 128, 441. 08 

60, 244, 565. 89 

External debt — 

Diplomatic debt, 3 per cent 101, 267, 650. 00 

Diplomatic conventions debt, amortizable, 3 per cent 3, 986, 156. 51 

Diplomatic conventions debt, not amortizable, 3 per cent_ 5, 733, 490. 26 

110, 987, 296. 77 

1 Statement brought up to March 19, 1915. 

2 Bolivar=$0.193 gold. 



468 PAN AMERICAN FINANCIAL CONFERENCE. 

Statement taken from report of Sr. Roman Cardenas, Minister of 
Finance, made April 19, 1915. 

The conference committee also hears with great pleasure from the 
representatives from the Venezuela Government that all interest on 
the debt of the country has been promptly paid during the trying 
times of the war period through which we are passing. This is a 
very gratifying evidence of the financial stability of the country. 

The committee refers with particular pleasure to the assistance 
given it by the representatives of the Eepublic of Venezuela, and to 
the various reports which the representatives have handed it, giving 
full details as to the exports and imports of the Republic of Vene- 
zuela. These were particularly useful to it in the preparation of 
this report. 

Respectfully submitted. 

Pedro Rafael Rincones, Chairman. 



BANQUET TENDERED TO THE DELE- 
GATES TO THE PAN AMERICAN 
FINANCIAL CONFERENCE BY THE 
SECRETARY OF THE TREASURY OF 
THE UNITED STATES « « « 

HALL OF THE AMERICAS, PAN AMERICAN BUILDING 
MAY 29, 1915 



469 



PROCEEDINGS AT THE BANQUET TENDERED TO THE 

DELEGATES. 

The delegates assembled in the banquet hall in the Pan American 
Building at eight o'clock p. m. 

At the hour of ten the Honorable William G. McAdoo, Secretary 
of the Treasury, rose and said : 

Gentlemen, I want to ask you to drink to the health of the Presi- 
dents of the Republics of South and Central America, individually 
and collectively. In proposing that toast I hope it typifies the 
spirit which I think animates this great gathering — one for all and 
all for one [applause] — the spirit that I hope will animate the 
Republics of South and Central America and the United States of 
America in their dealings with one another. [Applause.] 

The delegates rose and drank the toast proposed. 

Ambassador Domicio da Gama (Brazil) rose, amid applause. 

Ambassador da Gama. Gentlemen, you are right in applauding 
me, because I am simply rising to drink, and to invite you to drink 
with me, to the President of the United States of America. [Ap- 
plause.] 

Secretary McAdoo. Gentlemen, I am going to ask the Secretary of 
State of the United States to respond to the toast The Presidents 
of the South and Central American Republics." The Secretary of 
State. [Applause.] 

RESPONSE OF THE SECRETARY OF STATE THE HONORABLE WIL- 
LIAM JENNINGS BRYAN TO THE TOAST, " THE PRESIDENTS OF 
THE SOUTH AND CENTRAL AMERICAN REPUBLICS." 

Mr. Secretary, Excellencies, and Gentlemen : 

You have been so generous in the amount of time that you have al- 
lowed to me during these conferences that it requires the command of 
the Secretary of the Treasury to bring me before you again. He 
could not, however, have given me a subject more agreeable to my 
feelings than that which he has assigned to me. You were welcomed 
by the President of the United States — the one who speaks for all 
the people — and I am sure that- among the many addresses pf wel- 
come he has delivered, he never spoke more sincerely or cordially 
than when he greeted you upon the day of your arrival. I am near 
enough to him to know with what deep and constant sympathy he 

471 



472 PAN AMERICAN FINANCIAL CONFERENCE. 

has considered all the questions which have -come before him in con- 
nection with the interests of our sister Eepublics. He spoke to you 
from his heart, and I assure you that all that is dear to you is dear 
to him, to those associated with him, and to the people for whom he 
speaks. 

It is my good fortune to know the Latin American Republics quite 
intimately. I have the honor to be acquainted with the Presidents 
of some of these Republics and others have given me reason to have 
a high opinion of their wisdom because of the men whom they have 
selected to represent them at Washington. No part of my duty as 
Secretary of State has been more congenial or given me greater pleas- 
ure than that of associating intimately with the ambassadors and 
ministers who represent the Republics of South and Central America. 
We have had a recent evidence of the good judgment of your 
chief executives in the character of the delegates selected for this 
meeting. You came into our confidence through the credentials 
which you brought from your Governments; you return carrying 
with you our esteem and affection; you have won us by your own 
merit and by the intelligent interest which you have taken in the 
questions which concern Pan America. [Applause.] 

It is not proper at this hour that anyone, I, least of all, should 
occupy much of your time, but I shall speak long enough to violate 
one rule of oratory, namely, the one which limits the speaker to one 
subject, compels him to discuss it thoroughly, and then stop. I shall 
violate the first part of the rule by taking two subjects, and the 
second part of the rule by not discussing either thoroughly. I hope 
to observe the last part of the rule by stopping when I am through. 
[Laughter.] The first thought which I desire to submit was sug- 
gested by an experience which I had when, five years ago, I made a 
trip to South America. At Sao Paulo, Brazil, the second city of the 
Republic, I visited a normal school which was established, and is still 
conducted, according to plans taken by an American woman from 
New York. I was welcomed by one of the professors, who addressed 
me in my own language, and welcomed again by a student, who like- 
wise used the only language with which I am familiar; and then, 
when the program was over, the entire school arose and sang in 
English— 

My country, 'tis of thee, 

Sweet land of liberty, 

Of thee I sing. 

I still feel the thrill of that moment, and it suggests to my mind 
the thought which I submit for your consideration. Why not make 
the air of that song a Pan American air, each country using its own 



BANQUET. 473 

language and words of its own selection? Then, on such occasions 
as these, we can sing together, all joining in the tune, but each using 
the familiar language of his own national hymn. If the suggestion 
is worthy of consideration, I am sure that poets will be found in 
each country to carry out the idea. [Applause.] 

The second thought will not, I am sure, be out of place here ; it is 
the value of the acquaintances which have been formed here. In the 
last prayer of the Savior you will find an explanation of error which 
is, I fear, too often overlooked. His plea was " Father, forgive them, 
for they know not what they do." Ignorance is the fruitful source 
of sin in the individual ; it is the common cause of misunderstandings 
between nations. [Applause.] Our coming together on such occa- 
sions as these enables us to know each other better, and when we 
know each other we understand that the mistakes that are made are 
not of the heart but of the head, and we are all conscious enough of 
the frailty of the human intellect to be charitable toward each other 
if assured that the supposed wrong was not really intended. This 
conference, with the acquaintances formed and the friendships be- 
gun, will make misunderstandings less frequent and the amicable 
settlement of them more certain, if by any misfortune misunder- 
standings do arise. This is only the beginning of these conferences ; 
the success of this one insures future gatherings, and no one can 
foretell the benefits which will flow from them. 

And now let me ask you to carry back to the Presidents, whose 
representatives you are, assurances of our respect and esteem; say 
to them that we recognize that, inspired by the same lofty purposes 
and acting in conformity with the same principles of government, 
they, like our officials, are seeking to advance the welfare of the 
countries for which they speak. I join you in the hope that the 
rivalries of the future will be those honorable rivalries which are 
a blessing to those who participate in them, each endeavoring to 
excell in the contributions made to the welfare of all. Thus may we 
assist each other and live up to the opportunities and responsibilities 
of neighborhood — " What God hath joined together, let no man put 
asunder." [Loud and continued applause.] 

Secretary McAdoo. Gentlemen, the dean of the diplomatic corps 
of South and Central America, Ambassador Da Gama, has been good 
enough to agree to respond to the toast " The President of the United 
States." I now have the honor of introducing him. 

The members of the banquet party rose and applauded. 



474 PAN AMEBIC AN FINANCIAL CONFERENCE. 

RESPONSE OF AMBASSADOR DA GAMA TO THE TOAST " THE 
PRESIDENT OF THE UNITED STATES." 

Mr. Secretary and Gentlemen: On behalf of my colleagues 
of the Latin American diplomatic corps in Washington, I congratu- 
late you on the success of the Financial Conference. To be sure, we 
all anticipated the success, considering the excellence of the delega- 
tions that our Governments sent to this country and the high profes- 
sional ability of the experts on financial, industrial, and commercial 
subjects invited by the Government of the United States to discuss 
matters of common interest. There was every probability that good 
would result from the joint action of those wise, practical men in 
devising means of attaining their common interests — our common 
interests — but we also considered that five days were insufficient for 
that getting together which is essential to the success of a conference 
of this kind. The r± eater and the more grateful is our surprise on 
seeing that the five days of the last week of May were sufficient to 
lay the foundation for an international structure of such magnitude. 
This is only a start, only a beginning — the start in the movement 
whose end we can not guess. It has already created great hopes and 
aroused keen interest among our people. 

To you, Mr. Secretary, is due the honor for having conceived the 
happy idea of this Conference. Honor be to the United States and to 
the American citizens who have been working with you to further 
this idea and to give it concrete shape. 

This is the toast to the President of the United States. This is the 
toast to the American people. [Applause.] 

The banquet guests drank to the toast. 

Secretary McAdoo. In the limited time at our disposal to-night we 
have been compelled to curtail the list of speakers. We were very 
anxious to have a representative of our distinguished guests speak 
for them and a member from the United States speak on their behalf. 
The question was how to choose these gentlemen. We finally deter- 
mined to leave it to our foreign guests to say who should represent 
them, and I autocratically selected somebody to represent the gentle- 
men from the United States. It was a most interesting result, because 
I have found that with absolute unanimity our foreign guests selected 
that eloquent gentleman from Colombia who charmed this great 
Conference the other day with an inspired effort. It gives me the 
greatest pleasure, gentlemen, to again introduce to you the Honorable 
Santiago Perez Triana. [Applause.] 



BANQUET. 475 

RESPONSE ON BEHALF OF THE LATIN-AMERICAN DELEGATES 
BY DR. SANTIAGO PEREZ TRIANA. 

Mr. Secretary, your Excellencies, and Gentlemen : 

The Latin American delegates have done me the high honor of 
asking me to speak in their behalf. I am deeply thankful for the dis- 
tinguished honor. At the same time I realize the burden that has 
been placed upon my shoulders, and I bespeak from the Latin 
American delegates who have accepted that responsibility, from the 
representatives of the United States, and from the illustrious gather- 
ing here the full measure of kindliness and forbearance. We, the 
Latin American delegates, on behalf of our peoples and our Govern- 
ments, express our warmest thanks. We are thankful to the Govern- 
ment of the United States for having invited us to. this most im- 
portant Conference, and we are also personally thankful for the 
solicitous and untiring courtesy which we have met at every step since 
we landed on this shore, and which seems to constitute, as it were, 
the national atmosphere. 

We must express our thanks, also, to the Pan American Union and 
to its worthy officers, who have done so much for us in these days. 
It has been only a continuation of what they have been doing for 
our countries in the past. We must express our sincerest thanks to 
the illustrious Secretary of the Treasury — and here I am going to 
utter a wish which I hope, in fact which I know, all my fellow dele- 
gates will echo, and I wish that if they do so, as I know they will, 
they will say aye, and that is that Secretary McAdoo should come 
as a guest of our Republics as soon as he can. [Cries of " aye," " aye," 
" aye," and applause.] 

I want to say, on behalf of the delegates whom I represent here, 
we fully realize the transcendent aims of the Conference, and that no 
effort will be spared by our Governments, by our peoples, or by our- 
selves to further those ends. 

And, finally, I want to express my thanks to the Cabinet and to 
President Wilson, whom we all consider one of the noblest citizens 
of mankind [applause and cheers] — a man, a seer, who can see the 
truths of righteousness and can embody them in national policies. 
[Loud applause.] 

It behooves us before parting to realize the full significance of our 
endeavors during the past few days. The acts of men, when taken 
singly and isolated, are necessarily meager, incomplete, and limited. 
In the course of life they may acquire greatness, they may attain sub- 
limity, and at times a higher essence, as of sanctity. 

Look at that one quarrying the stone in the rock-ribbed hills or at 
him felling the rugged trunks in the somber forest. They are simply 



476 PAN AMERICAN FINANCIAL CONFERENCE. 

humble toilers of the passing day. Follow the rock and the trunk 
and see them embodied in arches or in columns or in the walls of a 
mighty structure, serene and beautiful, a beacon of hope of enduring 
centuries. Those humble toilers become the joint artificers of the 
glowing consummation. .We should look at the work that we have 
been trying to perform in the light of the aim that has guided us, and 
we need not fear the analysis. Our objective is that the continents 
of America should be the home of justice and of liberty. [Applause.] 
Our objective is that there should be no break in continuity from 
latitude to latitude, from one country to the other, and that in the 
uniformity and unanimity of that endeavor should reside the guar- 
antee of its continuance and the safeguard against the eternal menace 
of extraneous force. How far this Conference has worked in that 
direction time will tell; but this we know, that it has brought its 
share to the permanent structure and that it has paved the way for 
the future. 

The generations of the past did not shirk their burdens. Theirs 
it was to explore and to dominate the continent which loomed before 
them, from conquerors, from obstacles mysterious and menacing, in 
all the possibilities of the unknown. Theirs it was to evolve a new 
life, in a new land, of the elements of tradition and of training — as it 
were, the old alloy in a new crucible, with new ingredients added. 
Theirs it was at a later period to sever the connection with the parent 
lands. This was more than a political separation ; it was a manifes- 
tation of the fundamental incompatibility that exists between the 
old life and the new. At every stage of their development they faced 
manfully the call of destiny, and in the hour of travail, when they 
were put to the test of violence against overwhelming odds for their 
emancipation, from the first impetus in 1775 in the north to the last 
stricken field in 1824 in the south they were never found wanting. 
And the deeds of their history live in the memory of the present 
generation, and the calendar of their heroes — Washington, Bolivar, 
O'Higgins — and the myriads of their glorious companions, are the 
symbol of patriotism and are handed from man to man, from gen- 
eration to generation. [Applause.] 

After their independence came the period of reconstruction. Each 
had its own vital and intricate problem. In many parts gory vio- 
lence again reasserted itself, as if it were ordained that humanity 
should not take a step forward in the path of progress without blood- 
shed. If in the southern section the era of strife lasted well-nigh 
for three-fourths of a century, the one great conflagration in the 
North gathered in four tragic years of sorrow and bloodshed all that 
Was needed and required to vindicate for this Nation its name as the 
land of the free. [Applause.] 



BANQUET. 477 

And thus we have reached our day. Listen well, ye Americans of 
all sections of this hemisphere. Look well to it and see where your 
duty lies, and try to perform it as your forefathers performed theirs, 
for you have a weight of great importance and of glory upon your 
shoulders which is not only an incomparable boon, but which also 
entails sacred obligations. 

It is a current idea, one of the many truisms that are false, that his- 
tory repeats itself; nations grow, expand, and reach a glorious 
maturity and decay and disappear. Babylon and Egypt, Greece and 
Rome, and all the empires of the later day are used to confirm this 
dictum. Yet it is our privilege for the men of this continent and this 
generation to give the lie to the accepted dictum of history. We are 
laboring in the light of a sun that knows no setting. The free 
republics of this continent will form in a cluster an empire without 
an emperor. The empires of the past carried in them from their 
birth the germ of perdition, for there was inequality and there was 
oppression, and inequality kills the nation as a deadly poison kills 
the man. Our nations are free, and they shall live wedded to liberty 
so long as they remain loyal and faithful to the principles of democ- 
racy inscribed on the threshold of their history, and so long as they 
remember that eternal vigilance is the price of liberty. [Applause.] 

And here, for all can not be roseate — and he would not be the real 
friend of mankind who solely pointed to the dawn, forgetting that 
there is darkness to prepare for — here, I say, let me remind you again, 
fellow Americans, of two fundamental sources of danger which we 
must watch so as to avoid. Two dangers that might menace our con- 
tinent are the excess of power, running to predatory imperialism, and 
abuse of sovereignty. Imperialism grows apace with the conscious- 
ness of power. It is sporadic and it may grow in any part of our 
continent. Do not listen to its counsels and avoid it, for therein lies 
the death of liberty. [Applause.] 

Sovereignty entails, in the very conditions of its being, moral ob- 
ligations. When those moral obligations are forgotten, set aside, and 
trampled under foot, the claim of sovereignty can no longer exist. 

Apropos of this, permit me to remind you of a page of Flaubert in 
his Salambo. In the intermost sanctuary of the temple there stood 
the statue of the goddess Danite. She was enveloped in a mantle of 
golden tissue, radiant with costly stones. It was a deadly sin to set 
eyes upon the mantle, and to touch it meant instant death. A soldier 
in the army that lay besieging the city at the time of the narrative 
penetrated into the sanctuary, seized the veil, cast it over his shoulder, 
and walked unharmed through the terrified and helpless multitude, 
protected by the investiture which had thus become a cloak of crime. 

The mantle of liberty that should protect the whole continent, the 



478 PAN AMERICAN- FINANCIAL CONFERENCE. 

mantle of liberty that should insure each and every sovereignty, 
.should never be a cloak of immunity for misery and crime. It will 
be asked what lessons are to be learned, what are we to do? I say, 
" Look, and ye shall find," and you will reply it is not stated what is 
to be done in the rules that have been accepted ; but I tell you that 
no human rule can measure all of the possibilities of the future. 
But when such an occasion shall arise, seek and you shall find. 

Let us achieve prosperity and health, for in material prosperity 
there is health, even as it happens that the healthy body houses the 
healthy mind. In material comfort you will find the development of 
moral ideals. But of all things let that be the highest aim of our en- 
deavors; let us keep in touch with the treasure of our moral ideals, 
and let us see that those ideas and the ideals which incarnate them 
become each day more comprehensive and more charitable. And let 
us remember that the suppression of moral ideals would plunge 
humanity into darkness, but that if we were to destroy whatever the 
hand of man has created, churches and railroads and viaducts, and 
the magnificent works of art and of commerce, and all the properties 
of this stage of human life, and were yet to leave the human con- 
science in possession of its treasure of moral principles, we might still 
dwell in the assurance that prosperity would return and humanity 
would see, as it were, a new springtime, the blossoming of happiness. 
[Applause.] 

I believe that we must steer our course by these bright stars of 
hope — that that is the gospel we must preach to all nations, and that 
in this respect, at least, I may have managed to interpret the feelings 
of my fellow delegates. 

Fellow Americans, we leave you comforted and fortified. In the 
great task that lies before us we know that you will do your share, 
and you may rely upon it that we of the southern Republics will do 
ours in full earnestness and sincerity of purpose, and may God be 
with all of us. [Great and prolonged applause.] 

Secretary McAdoo. Gentlemen, I now desire to introduce to you a 
great international lawyer and a distinguished citizen who will speak 
for the United States, the Honorable John Bassett Moore. 

RESPONSE ON BEHALF OF THE UNITED STATES REPRESENTA- 
TIVES BY THE HON. JOHN BASSETT MOORE. 

Mr. Secretary and Gentlemen : 

A very grateful task has been committed to me this evening in 
undertaking to express the sentiment of the American representatives 
in this Conference. In performing its function I may be permitted 
briefly to trace the development of the idea of Pan Americanism. 



BANQUET. 479 

It is just one hundred years ago that Bolivar, who was then living 
in exile and poverty in Kingston, Jamaica, wrote the celebrated pro- 
phetic letter in which he undertook to foreshadow the future of the 
countries of America then struggling for independence and liberty. 
Their future was then uncertain. They were passing through trials 
and tribulations the result of which no man certainly could foresee; 
but with prophetic vision he undertook to predict the triumph of the 
cause in which they were then engaged. Five years later a great 
statesman of this country, Henry Clay, who had been a warm advo- 
cate of the cause of the Spanish- American colonies, proposed the 
formation of an American human-freedom league. The league which 
he proposed was based not so much on the idea of material interest 
as upon the idea of a solidarity of American interest, resting upon 
an identity of fundamental political principles. It was not so much 
the idea of force as it was the idea of the triumph of moral influences, 
the power of example, the power of ideas, of great thoughts that 
appealed to the common sentiments of the peoples of America. In 
1822 there came the recognition of the independence of the various 
American countries by the Government of the United States. This 
recognition had scarcely been given when their independence was 
threatened by a combination of the European powers for the restora- 
tion of those countries to a colonial condition. It was then that the 
great American statesman, James Monroe [applause] , framed the doc- 
trine which has since become one of the fundamental principles^- 
indeed, it may be said the chart and the guide of those American 
countries. As is well known, what is commonly called the Monroe 
Doctrine was formulated by John Quincy Adams, who was then 
Monroe's Secretary of State. In his musings on this subject Adams's 
thoughts took this direction. He said that the American countries 
as independent nations had the right to dispose of their own destiny. 
We had no right to dispose of it ; Europeans had no right to dispose 
of it. They alone possessed the right to say what their future should 
be; and, as an eloquent Argentine orator several years ago at the 
Fourth International Congress expressed it, it was then that these 
countries which had won their independence by their own efforts and 
sealed their liberties with their blood had thrown about them the 
shield of the protection of the United States. [Applause.] 

The term "Monroe Doctrine" has not always been a phrase with 
which to conjure. There have been different and varient interpreta- 
tions of that doctrine, sometimes not always agreeable to our breth- 
ren; but in this original sense of mutual cooperation, in the mainte- 
nance of the independent countries of America devoted to the cause 
of liberty, there has never been any diversity of sentiment among the 
American countries. 



480 PAN AMERICAN FINANCIAL CONFERENCE. 

It was my good fortune only three years ago to attend, as the 
delegate from the United States, the first of what is called the Inter- 
national Commission of Jurists to codify international law for the 
American countries, and the building in which we held our sessions 
was that beautiful structure called the Monroe Palace, situated on 
the magnificent harbor of Rio de Janeiro. 

In 1826 there came the Pan American Congress, which was sug- 
gested b}^ the author of the prophetic letter to which I referred a 
moment ago — Bolivar. The Government of the United States ap- 
pointed delegates to that Congress; but as the result of a difference 
of opinion in our national councils as to what the attitude of the 
United States should be or as to the extent to which it should inter- 
fere in the affairs of other countries the American delegates were 
late in arriving, and, as a matter of fact, the Congress had adjourned 
when they reached Panama. But the idea embodied in the pro- 
posal of Bolivar, which resulted in that Congress, was destined not 
to perish. It was expected after the Panama Congress was held 
that another international American congress would take place at 
Tacubaya, in Mexico. For certain reasons, in which it is unneces- 
sary now to enter, that congress was not held. From that time on 
for a number of years the idea of Pan Americanism, of Pan Amer- 
ican ideals, and Pan American sympathies underwent an eclipse. 
This fact was due to certain conditions that existed in this country, 
also to conditions of domestic disorder which prevailed in the coun- 
tries of Latin America. 

A great American historian has described the earlier days of the 
history of the United States as being the critical period of American 
history. These countries, the Latin American States, also were re- 
quired to pass through the critical period of their history ; but during 
this time, unfortunately, because of conditions here as well as there, 
they seemed to drift apart until they had reached a condition which 
was described in a story told of a certain island, celebrated in poetry 
and in song, where dissension was prevalent and discord seemed to 
reign. A foreigner, speaking to a native of this island, on a certain 
occasion said, " Why is it that you have so many discords ? " " Well," 
he replied, " there are Protestants in the north and there are Catholics 
in the south, and they are always wrangling. If the inhabitants 
were all agnostics, they would live together like Christians." 
[Laughter and applause.] 

Gentlemen, that story denotes the condition in which people are 
prone to dwell upon their differences and not upon the qualities 
which may tend to bring them together. In other words, they dwell 
upon their defects rather than upon their virtues. But a great 
change was destined to come. The civil conflict which raged in this 
country from 18G1 to 1865 taught our people that there was no 



. BANQUET. 481 

nation that was exempt from the possibilities of civil disturbance. 
Humility is the gateway to knowledge. Our own misfortunes have 
made us more sympathetic with the misfortunes of others. It pro- 
duced here a radical change in our attitude toward our brethren of 
the other countries of America, and from that time there have been 
manifest a sympathy and a toleration and a desire for cooperation 
which had not existed before. One of the first signs of that change 
of attitude was the peace conference held in Washington in 1870 to 
bring about peace between Spain and the countries on the west coast 
of South America with which she had been* at war. That confer- 
ence was presided over by a great Secretary of State — Hamilton 
Fish — and resulted in the conclusion of what was called a perpetual 
armistice, under which the conflict was brought to an end. 

Without tracing step by step the development of this later and bet- 
ter policy, I may refer to the assembling in this city of the first In- 
ternational American Conference in 1889. I suppose it is one of the 
signs of advancing age to indulge in reminiscence. It was my good 
fortune to be present at the meeting of the first International Ameri- 
can Conference in 1889 and from time to time to contribute to its 
labors. Without entering minutely into the results of that confer- 
ence I will refer to just two things that were accomplished. The 
first was the formation of the Pan American Union. We meet here 
this evening in this magnificent building which stands as a monu- 
ment to the initiators of the first International American Congress. 
It represents also the consummation of the thought to the promotion 
of which they dedicated their efforts. Another act of that conference 
was the adoption of a plan of arbitration. This plan was in advance 
of its time, and for that reason failed to receive the approval of the 
governments concerned and never was carried into effect. But it 
has stood before the peoples of the Americas from that time to this 
as an ideal and an inspiration, and a long step toward its complete 
fulfillment has been taken in the making of these peace agreements 
which have been initiated and carried out by our Secretary of State 
who is with us this evening. [Applause.] 

More than that, at this very Conference in which we have been 
taking part there has been adopted with unanimity the proposal to 
apply the principle of arbitration to the adjustment of commercial 
disputes. [Applause.] 

There has been a great deal said from time to time as to the possi- 
bilities of Pan Americanism, and as to how far it was a matter of sub- 
stance, and how far it was a matter purely of sentiment. Now, for 
my part, I do not draw any sharp line of demarcation between mat- 
ters of substance and matters of sentiment, because I believe that his- 
tory teaches us that the one is as important as the other. But there 
98257°— 15 31 



482 PAN AMERICAN FINANCIAL CONFERENCE. 

existed in the development of the material side of Pan Americanism 
in former times certain serious obstacles in the United States. The 
failure to carry out certain Pan American plans was not due so much 
to any disinclination to advance the cause of Pan Americanism as it 
was to the existence of certain conditions that form an obstacle to 
that development. One of those conditions was that the United 
States down to a very recent time was largely a borrowing nation. 
It has not been so very many years since the majority of the stock of 
one of our large eastern railway systems was owned abroad, and a 
very considerable minority interest in another great eastern railway 
system was likewise owned abroad. I may refer to the Foreign Rela- 
tions of the United States, that most authentic publication, as au- 
thority for my statement. 

But those conditions have changed. Little by little we have ceased 
to be a borrowing nation on so large a scale; until within the past 
few days the governor of the board of our reserve system has just 
lifted a little of the veil and disclosed the enormous accumulation of 
capital reserves in the United States. Another obstacle was this: 
Our people were much occupied, you may say almost exclusively 
occupied, in the development and enjoyment of the great domestic 
market which we had here at home, in which they conducted busi- 
ness at a larger profit and with less credit than they could conduct 
it with a foreign nation. That, too, has changed the development 
of our industries and has created a great surplus for exportation. 
That was foreseen some years ago in the effort to dispose of our 
surplus products by means of reciprocity treaties. So that we have 
come now into a situation where, as a result of changed conditions, 
we take a more active interest and can take a more effective interest 
in the development of foreign commerce and in the extension to other 
nations of the aid of our financial resources. It is sometimes said 
that commerce is war. Gentlemen, I must repudiate the theory that 
the consumption of products is to be increased by the killing off of 
the consumer. It is a wholly erroneous idea that commerce is to be 
conducted on the lines of hostility. That thought may have done 
very well in the days of colonial monopoly, which continued down 
through the first third of the last century, but in the present age 
commerce should be regarded not as a matter of warfare but as a 
matter of mutual exchange of benefits. Commerce consists in the 
exchange of commodities. A produces enough for himself and a 
surplus. He wishes to dispose of that surplus to his neighbor. He 
creates enough of a certain article for himself and has a surplus. 
He wishes to dispose of that to his neighbor. Now in that exchange 
there is mutual benefit. There is no injury involved. So that we 



BANQUET. 483 

have reason above the old conception that commerce is to be con- 
ducted on the lines of warfare, to the higher and nobler conception 
that commerce is to be regarded as a transaction which is essentially 
the exchange of mutual benefits. The idea for which we stand 
to-day, and for which I may say the American delegation in this 
Conference stands to-day, is that our commercial relations, that the 
great design of our commercial relations, is the establishment of a 
condition of mutual prosperity, of mutual content, or mutual justice 
between man and man and between nation and nation. [Applause.] 

Our hope and our aspiration is that these exchanges which we 
desire to promote and facilitate shall result in the establishment of a 
condition of good fellowship. An illustrious traveler, a good friend 
of this country and of the other countries of America also, in a 
work published a year or two ago, said that there seemed to be 
something misleading in the use of the word "American." His idea 
was that the use of this term had led us to assume that there existed 
an identity of interests which really did not exist. 

Now, this idea of America being not simply a geographical term 
but a term representing a community of interests, has existed so 
long, that there is a fair presumption that it is not a term that mis- 
leads us, but a term that is thoroughly and persistently leading us 
in the right direction. [Applause.] 

The word "America," beginning in the early part of the last century 
during the struggles of our neighbors for independence, represented 
the idea of the community of political interests in which, as Henry 
Clay said, we would be regarded as standing together for the estab- 
lishment of the human freedom league; and this idea has now ad- 
vanced, until to-day we are undertaking to establish a community of 
interests with regard to all our activities. The great significance of 
this Conference, called by the Secretary of the Treasury, lies in the 
fact that it represents the last page in this development. 

Identity of political interests we have and have had for many 
years. We now proceed to make the circuit complete by estab- 
lishing the identity of our material interests on the broad basis of 
justice, contentment, and good fellowship. This is what the word 
"America " stands for ; this is what we want to make the word 
"America " continue to stand for ; and in saying this I affirm with 
all confidence that I speak for the hopes and the aspiration of the 
American delegation to this Conference. [Loud applause.] 

Secretary McAdoo. Gentlemen, in your generosity you have ac- 
corded to me praise that I do not deserve. I make the confession 
because the secret service is located in the Treasury Department, 
and they might discover the truth and turn upon me. 



484 PAN AMERICAN FINANCIAL CONFERENCE. 

There are two men here who deserve the greatest possible praise 
for the success of this Conference, and I want to ask them to say 
a word to you. These men are the Honorable Andrew J. Peters, 
Assistant Secretary of the Treasury [applause] , and Dr. L. S. Rowe, 
your efficient Secretary-General. [Applause.] 

I do not find words to express the loyalty, faithfulness and de- 
votion which these two gentlemen have brought to bear upon the 
task which has been committed to them. 

I shall now ask Mr. Peters if he will not say a few words to the 
audience. [Applause.] 

SPEECH OF HON. ANDREW J. PETERS, ASSISTANT SECRETARY 

OF THE TREASURY. 

Mr. Secretary, fellow citizens of this great hemisphere, and gen- 
tlemen : 

We are here to-night at the close of this Conference to have one last 
meeting together, then to separate to our homes. I appreciate the 
opportunity which the Secretary is giving me to say a few words to 
you and to tell you what a pleasure it has been to be associated with 
this Conference. 

The members of the Conference have one and all met in a spirit 
of cooperation and of interest toward a common end. There has 
been no seeking for individual ends, but the Conference has distin- 
guished itself by a spirit of intense cooperation, each striving with 
the others to help accomplish the common object of our meeting. 

In past years there has been a woeful lack of understanding in 
this country as to the great undeveloped resources in the sister 
Eepublics. With our vast country, which has needed the efforts of 
our citizens, we have devoted almost all of our energies toward the 
development of our own country and have given but little thought 
or attention to the situation in our neighboring Republics. To-day 
we find in the United States a broader, more liberal, and wider view 
and a greater interest. [Applause.] 

Lack of knowledge breeds suspicion and jealousy. A better knowl- 
edge and a better understanding is the surest foundation upon which 
mutual advantage and mutual fellowship can be based. I do not 
believe our meeting to-night is the end; I do not believe what we 
have all seen accomplished this week is the completion of this Confer- 
ence. We are not at the end ; we are at the beginning, and I predict 
that we will see spring from this Conference a permanent organiza- 
tion, strong in its ideals, firm in its purposes, which will tend to 
develop and bring together the people in these sister Republics of 
the Western Hemisphere, so that as each year goes by there will be 
a better and a truer understanding of our people and a better and a 
truer cooperation between their citizens. [Applause.] 



BANQUET. 485 

This desire for a clearer understanding is not a selfish thing. We 
do not mean by our relations with our neighbors that they should be 
used for exploitation. The only true advantage of commerce is a 
mutual benefit and exchange of commodities to the profit both of the 
seller and of the purchaser. One nation can not sell unless it buys 
from its customer in return, and it is to promote these objects, it is 
to promote the commerce between these Republics of the hemisphere 
of the west that we are meeting here at this time. 

Mr. Secretary, it has been a great pleasure, indeed, to serve under 
your interest and direction in this work. Each day we have had 
the opportunity of learning much of the views and of the interests 
of our neighbors. Each time that we have met I believe that every- 
one obtained a better and more complete understanding of the con- 
ditions of the respective countries. 

When I was first sent for by the Secretary, who at that time was 
suffering from a severe illness, he told me to take charge of the pro- 
ceedings and to see what our guests wished and then supply it. And 
if you have found that our hospitality, which we have extended with 
so much pleasure, has been in any way wanting, the blame rests with 
me [applause] , because I was selected to make every effort for your 
comfort while you were here. In carrying out the arrangements, for 
this Conference we all owe a great debt of gratitude to one of our 
friends who is here to-night — to Dr. Rowe — whose interest, whose 
unselfish efforts, and whose time and thoughts have been given whole- 
heartedly to the work here, and I now, sir, convey to you the feelings 
of everyone in this hall when I say we are deeply grateful to you. 
[Applause.] 

To Mr. Sands, to Mr. Miles, to Mr. Gittings, to Mr. Parker, and 
to Mr. Heinl, who each and every one of them have given unstinted 
measure of their, efforts to the arrangements, we owe a great debt 
of thanks, and whatever success has been accomplished in carrying 
out the program of your entertainment is due to their devotion and 
to their interest each day. 

It would be a lack of courtesy for me to take advantage of 
my present position to trespass on your time; but I wish to say 
to you, sirs, to you delegates from our sister Republics, that you have 
done us an inestimable favor by coming here ; you have obtained our 
point of view, and you have given us a basis for a clearer and more 
accurate and friendly understanding of all problems which we face. 
In giving up your time, in making the long and in many cases the 
tiresome journey to this country, you have performed a public serv- 
ice for which the citizens of both continents of America should be 
grateful. And to you, gentlemen, to you American guests here, busi- 
ness men whose lives are full of interest which you have XDut aside 



486 PAN AMERICAN FINANCIAL CONFERENCE. 

to come here to this Conference, we owe a debt of gratitude also. 
A nation can not progress unless it possesses the interest and the 
patriotism of its people. To make this Conference a success, to make 
it the foundation for the future on which we believe it rests, we must 
have the interest and cooperation of American citizens. You have 
done a patriotic service by coming here, and no matter how great 
your measure of sacrifice you can feel that you have added something 
of benefit by attending and giving us your work and serving this 
week with us here in Washington. [Applause.] 

For myself, if I may add a word, it has been a week of infinite 
interest and of great pleasure. It has formed friendships which 
I, for my part, believe will always exist. We have met you, strangers 
to our shores, and established ties which will forever bind us to- 
gether and which will forever in our minds bind your countries to 
the United States. 

I believe that this Conference has accomplished much, and I think 
that when we separate we can go with the consciousness that in meet- 
ing together here, knowing and consulting one another, we have taken 
a step forward which will inure to the benefit of many peoples, and 
to the health, happiness, and contentment in the national lives of 
all dwellers in all of the Eepublics of the Western Hemisphere. 
[Prolonged applause.] 

Secretary McAdoo. Gentlemen, I now have the great pleasure of 
introducing to you Dr. Leo S. Eowe, the Secretary- General of the 
Conference. [Applause.] 

SPEECH OF DR. LEO S. ROWE. 

(Dr. Eowe spoke in Spanish as follows:) 

Mr. Secretary and gentlemen of the Conference: Permit me 
first to express my warm appreciation to all the delegates for the 
hearty and enthusiastic cooperation that they have given me in the 
work of this Conference. It has been my good fortune to attend a 
number of international congresses, but I know of none in which each 
and every delegate has been imbued with so deep a sense of public 
obligation and so high a concept of the important mission which he 
has been called upon to perform. For your generous indulgence and 
in overlooking any shortcomings in the conduct of the Secretary-Gen- 
eral's office, you have my deep and heartfelt thanks. 

These have been happy days for me, in some respects the happiest 
of my life, for I have had the feeling, as never before, that we are at 
the beginning of a new epoch in the international relations of the 
American continents. I begin to see coming to full fruition a new 



BANQUET. 487 

concept of international relations, one built upon the idea of coopera- 
tion and mutual benefit rather than of rivalry and jealousy. 

Important as have been the questions presented to this Conference, 
I can not help but feel that its significance is far deeper than the 
questions included in the program. It is an inspiring spectacle that 
may well arouse the enthusiasm of every patriotic citizen to realize 
that at a time when hatreds and antagonisms are dominating so 
great a part of the western world, the Eepublics of America assemble 
in a spirit of mutual helpfulness to take counsel of one another and 
to devise ways and means through which they can promote the spirit 
of union and cooperation. 

Viewed from the broadest possible standpoint, it means that the 
great mission of the Republics of the American hemisphere is coming 
to full fruition. We may well rejoice at this great privilege of giv- 
ing to the world at a critical moment an example of international 
solidarity. A new note has been struck in international relations, 
which can not help but resound throughout the civilized world. 

I am free to confess that my enthusiasm is not aroused by the 
mere thought of belonging to a country covering a vast area or 
containing one hundred or two hundred millions of inhabitants, 
but it is my ambition that the country to which I belong shall be 
a leader in setting a new standard in international relations and 
will give to the world a new idea, namely, that its own welfare, 
its own greatness, its significance in the onward march of civiliza- 
tion depends and is in direct ratio with the service which it is able 
to perform to other nations, and particularly to its sister Eepublics 
of America. 

Important and far-reaching as is the significance of this Confer- 
ence, its full and final import can only be judged in that larger per- 
spective in which loom up the successive steps toward the goal of 
Pan American solidarity. 

Permit me in closing, Mr. Secretary, to thank you for the honor 
you have done me in selecting me to assist you in this great work. 

Let me also take this opportunity to thank the governing board 
of the Pan American Union for their generosity in placing all the 
facilities of this magnificent building at the service of the Confer- 
ence. I also wish to express my special appreciation to the Director 
General of the Pan American Union, the Honorable John Barrett, 
whose remarkable and efficient executive direction has made possible 
the arrangements for the sessions. Finally, I desire to say a word of 
the deepest appreciation to the Honorable Andrew J. Peters, Assist- 
ant Secretary of the Treasury, for his self-sacrificing and self -effac- 
ing devotion to the work of this Conference, and also to the four 
assistant secretaries general and to the nineteen group secretaries, 



488 PAN AMERICAN FINANCIAL CONFERENCE. 

without whose aid it would have been impossible to conduct the work 
of the Secretary-General's office. 

I close with a deep sense of gratitude to you all, and drink to the 
health and prosperity of every member of this historic Conference. 
[Loud and prolonged applause.] 

Secretary McAdoo. Gentlemen, there is just one more brief speech 
to which I wish you to listen. As our foreign guests landed on the 
soil of New York City — and most of them landed there, I believe — 
they were met by a committee, at the head of which was Honorable 
Dudley Field Malone. I know that he made you feel the warmth 
and genuineness of the hospitality of this country. [Applause.] 

SPEECH OF HOST. DUDLEY FIELD MALONE. 

Mr. Secretary and gentlemen of the Pan-American Financial 
Conference : This is not my idea of a good time to make a speech. 
I have a friend in New York who has varying ideas about the proper 
length of an after-dinner speech. He is of Irish origin and is always 
of course entitled to free speech, and he has said that any place in a 
speech is a good place to stop, and that if an egg be bad, one taste is 
enough. There is a wisdom in those thoughts at this hour of the 
evening. 

When I first heard of the completion of the Panama Canal I was 
in very grave doubt as to whether or not it was to convey us and 
our sister Republics a benefit or a disadvantage, because it separated 
North and South America into two islands, and I did not know 
whether or not w T e were hereafter to live in a state of splendid 
isolation or in a state of comity, interest, and commerce. Indeed, I 
was very much like that Irishman who saw a building going up, and 
as he looked at the mortar between the bricks he said, in his own 
peculiar philosophy: "Will it keep them together or keep them 
apart ? " [Laughter.] 

Gentlemen of this Conference, the sessions which you have held 
this week are a tangible, practical, and enduring answer to the prob- 
lem of which the digging of the canal has been merely the physical 
expression; namely, the bond which has drawn closer and closer 
into friendship and commercial intercourse the republics of the 
North and the republics of the South. [Applause.] 

This has been a great Conference for a number of reasons. This 
Conference could not have occurred by the mere wish of any one 
man. It is the fruition of a fine idea, and you are fortunate to-night 
in having present with you the men who have made it possible, not 
only to have this building, but to have the Conference during the 
past week in this building. Not the least among the men who, 



BANQUET. 489 

through seasons of adversity and through seasons of prosperity, have 
with tenacity, philosophy, and American courage stood by the Pan- 
American idea is the Director of this Union, the Honorable John 
Barrett. 

Gentlemen, you would not have come to us in your spirit of friend- 
ship, the spirit which I discovered when the Secretary of the Treas- 
ury did me the honor to send me down to the Narrows and set me on 
a tug in order that you might be the only ones who came into the 
port of New York without paying duty; you would not have come 
in such a friendly spirit had you not been given the opportunity to 
know what the heart and purpose of the American people was toward 
you, your peoples, and your Republics. And this idea was never 
more eloquently and in a more truly and patriotically American 
fashion asserted than by the gospel which has been preached for a 
decade of years by the man whom America is proud to call one of 
the greatest Secretaries of State we have ever had, Mr. Bryan. 
[Applause.] I believe there could be no better motto for your Con- 
ference, for the future organization consequent upon it than that 
which he set in such pithy form to a distinguished citizen of one of 
your Republics when he said : " The Lord hath made us neighbors ; 
let justice make us friends." 

It is not enough that we should have the sentiment of friendship. 
It must be solid; it must be supported by the tangible evidences of 
friendship in legitimate, honest courses of trade and commerce. 
That this Conference has been a success is due to the fact that if Mr. 
McAdoo never did anything else for his country than what he did 
when he conceived and put into operation the purposes of this meet- 
ing, he brought about an understanding and a modus vivendi and 
a method of operation for the practical expression of the feelings 
of our people, which feeling is going to find its fruition in the 
increased commerce and trade of the entire continent, not only for 
the preservation of the products of America but for the protection 
of the hemisphere against the opposition of the world. [Applause.] 

It is very thoughtful of the Secretary to have called on me at this 
farewell gathering to help say good-by to you, because I first met 
you in New York, and I am compelled to say that you look the worse 
for wear this week. Then you were fatigued from entertainment, 
now you are suffering an honest fatigue from labor ; so you have the 
consolation of going to sleep with clear consciences this week, which 
I hope, but I am not sure, you had last week. [Laughter.] 

However, gentlemen, it has been a pleasure for me to have a per- 
sonal identification with your Conference, even remotely, away in 
New York. It was a distinguished honor to represent the Secretary 
of the Treasury, and it will be a long while before I shall forget 



490 PAN AMERICAN FINANCIAL CONFERENCE. 

the many hospitable, friendly, and genial influences with which I 
came into contact by intercourse with all of your delegates. Nothing 
more can be said than this, that the United States of America should 
be proud of the efforts which she, through her officers of the govern- 
ment, has exerted, and the United States of America is proud of 
every delegate who came from the sister Republics to attend the 
Conference. This will only be completely successful when we of the 
United States send to the countries of Central and South America 
men who have the same standing here as you have at home, men of 
the same caliber, business ability, morals, and ideas as those whom 
the sister Republics have sent to the United States. [Prolonged 
applause.] 

Secretary McAdoo. Gentlemen, there were printed for distribution 
among the guests of the evening copies of the Federal Reserve Act 
containing Governor Hamlin's splendid indexed digest, and specially 
bound with the name of each delegate stamped thereon. The guests 
of the evening have, however, changed so much since the first accept- 
ance that we have not books for each member here to-night. I would 
suggest that those who have not received copies should hand their 
names and addresses to the Secretary- General, Dr. Rowe, who will 
see that books are sent to them. We have no blank copies, and so 
can not furnish them to-night. 

And now, gentlemen, the hour has come for us to part, and before 
we do I should like to make grateful acknowledgment to the press 
of this country for the splendid and sympathetic treatment it has 
given to the proceedings of this Conference. [Applause.] We 
are deeply grateful to the newspapers of America. I also wish to 
express my deepest appreciation and thanks for the use of this beau- 
tiful building for the proceedings of this Conference, and to Mr. 
John Barrett and to all of the directors of the Pan American Union 
for their kindness and courtesies. 

And now, my friends, I wish to dismiss you with this simple bene- 
diction, that while you in Latin America speak a different tongue 
from that which we use in North America, yet let us hope that we 
shall always speak the common language of friendship and mutual 
admiration. [Prolonged applause.] 



NOTES ON THE TRIP OF THE 
DELEGATES, AT THE CONCLU- 
SION OF THE CONFERENCE 



491 



TRIP MADE BY THE DELEGATES. 



As guests of the United States Government, a number of the dele- 
gates of the Pan American Financial Conference availed themselves 
of an invitation extended by the Secretary of the Treasury, Mr. 
McAdoo, to secure a first-hand view of the industries and activities 
of at least nine large cities of the country. Notwithstanding the fact 
that they were traveling almost constantly for two weeks it was 
interesting to the delegates that they were able to traverse less than 
a quarter of the great United States. A notable feature of the trip 
was the cordial reception accorded everywhere. The party traveled 
through nearly 3,000 miles of country; it visited ten States, and was 
entertained and banqueted by twelve leading American cities. There 
was unfading hospitality; Nation, State, and city united to make the 
journey memorable. 

In spite of the fact that he had barely recovered from a serious 
illness, it was the earnest intention of Secretary McAdoo to accom- 
pany the party. It was therefore with the greatest reluctance, and 
only because important matters of State arising from the world crisis 
required the members of the President's Cabinet to be in Washington, 
that Mr. McAdoo was finally obliged to forego the pleasure of person- 
ally conducting the delegates en route. In his stead he therefore 
selected Hon. Andrew J. Peters, Assistant Secretary of the Treasury, 
to head the party. Mr. Peters, a former member of Congress from 
Boston, was in personal charge throughout the entire trip. 

At the disposal of the guests was a seven-car vestibuled special 
train. The equipment was new throughout. In addition to each 
member of the party having a separate compartment, there were 
library, club, and observation cars for his comfort. It was arranged, 
however, that of the fourteen days en route only five nights were 
spent on the train and the remainder in hotels. 

One notable feature of excellent service was the transfer of more 
than one hundred pieces of baggage from train to hotel and vice 
versa at each city visited. The delegate left the train with no 
thought of his belongings, and in most cases upon arrival at his hotel 
found his baggage had preceded him, a convenience which was highly 
appreciated by the travelers. 

ANNAPOLIS. 

The travelers left Washington for Annapolis, the historic capital 
of Maryland, an hour by trolley, to inspect the United States Naval 

1 A complete itinerary and map of territory traversed will be found on page 81. 

493 



494 PAN AMERICAN FINANCIAL CONFERENCE. 

Academy. There they were greeted by Commander Guy H. Bur- 
rage and a special detachment of cadets, who acted as an escort about 
the beautiful grounds. In the Severn River near by there was a fleet 
of battleships. Of particular interest to the visitors was the tomb 
of John Paul Jones, the father of the American Navy. 

It was recalled to them that on December 23, 1783, General 
Washington surrendered his commission as Commander in Chief of the 
Continental Army to Congress, then sitting at Annapolis. In 1608, 
Capt. John Smith visited this site, but no settlement was made until 
1649, when a company of Puritans from Virginia established here a 
town which afterwards came to be named Annapolis, in honor of 
Queen Anne. 

BALTIMORE. 

The party arrived at Baltimore in time for luncheon. After a 
sail around the historic harbor, passing the spot where the Star 
Spangled Banner, the national anthem, was written, there was an 
automobile trip about the city, which included a short stop at the 
Baltimore Country Club. So wonderfully had the city built up and 
progressed that it was utterly impossible to tell which part of it had 
been devastated by the great fire. 

The manufacturing enterprises of Baltimore are most varied, 
scarcely a single important industry being unrepresented. It is said 
to be the largest manufacturing center in the United States for fer- 
tilizers, straw goods, cotton duck, fruit canning, and oyster packing. 
In the total value of its manufactured products Baltimore stood, in 
1909, thirteenth among the cities of the United States. The ship- 
building industry there has recently undergone marked development. 

Mayor Preston, host at dinner, made his welcoming speech in 
Spanish. Dr. Perez Triana, former Minister from Colombia to Great 
Britain, and Dr. Alfonso Quinonez, Vice President and former Presi- 
dent of Salvador, were among those to respond. It was really only 
a beginning for Dr. Perez Triana, whose fame as an orator went ahead 
of him, for he was obliged to speak in almost every city. United 
States Senator Blair Lee, of Maryland, also spoke. Striking was the 
table arrangement — a hollow oblong — practically inclosing the huge 
ballroom. In the center were the flags of the Americas and ingenious 
miniature fountains, ponds, brooks, and landscape effects. 

PHILADELPHIA. 

With bands playing, flags of the various countries flying, and 
the broad streets lined with enthusiastic spectators, the delegates 
were taken to Independence Hall in Philadelphia. On the spot 
where the delegates of the 13 English colonies — which were so soon 
to become the United States — had met 139 years ago to declare 



TRIP MADE BY THE DELEGATES. 495 

their independence, the representatives of the 13 American Republics 
heard Mayor Blankenberg advocate a closer union of the Americas. 
He proposed a declaration of "interdependence" for the Americas 
and the United States. The venerable Dr. Pablo Desvernine y 
Galdos, Secretary of State for Cuba, acting as honorary chairman of 
the meeting, was greeted by continued applause. Roger W. Babson, 
of Boston, was appointed temporary secretary. Dr. Gonzalo Vergara 
Bulnes, a prominent lawyer of Chile, who responded to the mayor's 
salutation, was also warmly greeted. Just before the meeting there 
was an inspection of the Liberty Bell. 

A proposed international trade flag was presented to Mr. Peters — 
to be forwarded to Secretary McAdoo — by Miss Sarah Wilson, grand- 
daughter of Betsy Ross, who made the first American flag. The 
presentation took place in the Betsy Ross House, where the Stars 
and Stripes first saw daylight. The new flag was designed by the 
Philadelphia Chamber of Commerce and made by Miss Wilson. It 
was of pure white, bearing in the center a single star of the same blue 
which marks the field on which the white stars of the flag of the United 
States are emblazoned. Miss Wilson suggested the flag might be used 
on ships plying between the Americas. 

"I venture to pray," she went on, "that under the wise guidance of 
the Almighty God the day may sometime come when all ships 
engaged in trade between the Americas may fly this flag, as it stands 
for equality of opportunity and security for the peoples of all nations." 

There was a visit to League Island Navy Yard, where a boat was 
taken for a trip on the Delaware River along the city front to the 
famous plant of the William Cramp & Sons Ship & Engine Building 
Co. A hat factory — that of John B. Stetson — covering 6 acres of 
ground, and where three and a half million hats are made every year, 
interested the visitors. 

"If there were not a factory of any kind in the Latin- American 
countries," said Alba B. Johnson, president of the Baldwin Loco- 
motive Works, at the formal dinner, "Philadelphia could supply to 
the inhabitants every necessity and most of the luxuries of life." 

Mayor Blankenberg spoke. Secretary Peters and Dr. Perez Triana 
responded for the visiting party. The next morning there was a visit 
to the Baldwin Locomotive Works. At the United States Mint it so 
happened that a quantity of Cuban dollars were being coined. 

PITTSBURGH. 

An hour before the train reached Pittsburgh the night skies began 
to be illuminated by the reflection of hundreds of roaring steel 
furnaces. Bright and early the next morning — and not discouraged 
by a steady downpour of rain — a special train was boarded for 



496 PAN AMERICAN FINANCIAL CONFERENCE. 

McKeesport, Pa., where is located the extensive plant of the National 
Tube Works. A party of fifteen young girls presented each of the 
delegates with a carnation and a card bearing a message of greeting. 
As in other immense plants, but here particularly, the sightseers were 
impressed with the manner in which the " safety first" campaign 
of protecting workmen has been carried forward. There was pointed 
out to them what was said to be the longest manufacturing building 
in the world. They saw every sort of steel tubing made. 

On board the steamer Sunshine, where luncheon was served, a trip 
of several hours along the Monongahela River revealed shores lined 
for twenty-five miles with gigantic steel plants and blast furnaces. 

Various processes of steel manufacture were explained in detail 
at the Homestead works of the Carnegie Steel Co. It is one of 36 
separate plants of a concern which has 40,000 employees. 

In the armor-plate mill, opened only on very special occasions 
to visitors, there were seen the port plates for the Arizona, the new 
United States battleship just launched, and the onlookers were told 
how it took nine months to make one plate. They were shown plates 
which will be riveted to the battleship California, also building — 
great curved pieces of steel that require special railroad cars to carry 
them. The magnitude of the operations held the visitors in wonder. 
They saw steel in every form, from the red ore in the cars and the 
liquid iron of the blast furnaces as it ran into pigs, into the great 
steel ingot that wouid crush a house should it fall upon it, to the 
finished strips and plates into which the ingot was mauled and jammed 
and fashioned in less time than a cook can shape a lump of dough into 
a loaf. And it is so much of a physical task to endeavor to walk 
about one of these great plants that it took a major portion of a day 
to see a small part of it. 

At a dinner given by the Chamber of Commerce of Pittsburgh, its 
president, David P. Black, told of Pittsburgh's interest in the growth 
and welfare of the countries to the south. Mayor Joseph G. Arm- 
strong spoke along the same line. George W. Guthrie, United States 
ambassador to Japan, said it was absolutely necessary for the South 
American nations and the United States to come into more friendly 
contact with each other. Henry P. Bope, president of the Foreign 
Trade Commission of Pittsburgh, and Samuel Hardin Church, 
president of the Carnegie Institute, spoke. Dr. Vicente Gonzales, 
of Ecuador, said that the various Governments had shown their 
confidence and friendliness by accepting Secretary McAdoo's invita- 
tion to take part in the Pan American Financial Conference. 

The following morning until train time, a visit to the glass works 
of Pittsburgh and automobile rides through the beautiful parks of the 
city occupied the time of the delegates. 



TRIP MADE BY THE DELEGATES. 497 

ST. LOUIS. 

Governor Major, of Missouri, a battalion of the National Guard, a 
squadron of police, and a brass band met the train in St. Louis. 
Finely equipped special street cars carried the party from the station 
while people in shops and factories applauded. Different features 
were arranged by committees of the St. Louis Business Men's League 
and of the St. Louis Clearing House Association. There was a visit 
to the Missouri Botanical Garden, which was laid out and presented 
to the city by Henry Shaw. In the day's program was an automo- 
bile trip over the city. St. Louis is noted as a commercial center. 
The wholesale trade exceeds in value $600,000,000 per annum. The 
city also commands over 6,000 miles of direct navigation by river, 
accessible to steamers and barges during a large part of the year. 
There are upwards of twenty lines of railway, some of which are parts 
of extensive systems, entering the city. Transportation by rail is 
facilitated by five bridges across the Mississippi and Missouri Kivers. 

The Latin-American guests were taken to the farm once owned by 
General U. S. Grant, now the country home of August Busch. Gen- 
eral Grant was born in Ohio, but he married Julia F. Dent, of St. 
Louis, a sister of one of his classmates at West Point, and the Missouri 
city afterwards became closely associated with the great soldier and 
president. 

A banquet was spread at the Sunset Hill Country Club. The next 
day there was more sightseeing and a luncheon at the St. Louis Club. 

CHICAGO. 

To the flourishes of trumpets, a detachment of cavalry forming a 
guard of honor, the Pan American guests were escorted from the 
station to hotel, along Michigan Avenue, in Chicago. Early the next 
morning there was a special welcome to the second largest city in the 
United States — for Chicago now has a population of close to two 
million and a half — by Mayor Thompson in the many-storied City 
Hall. The latter, located in the business district, gave the visitors 
more the impression of an American "skyscraper" rather than a 
conventional city edifice. However, owing to a law restricting the 
height of buildings, New York has taller business structures than 
Chicago, some of them approximating close to forty stories. The 
highest in Chicago is twenty-two stories, but at least one office building 
spreads over so much ground that it affords a capacity for 6,000 tenants. 

Inasmuch as the city of Chicago possesses one of the most beautiful 
park and boulevard systems in the world — and incidentally some 
4,000 miles of paved streets — it was appropriate that a great auto- 
mobile sightseeing trip should be in order. The route taken led 
north, but finally completely encircled the city, coming in from the 
98257°— 15 32 



498 PAN AMERICAN FINANCIAL CONFERENCE. 

south. The Chicago Kiver and its branches divide the city into 
three parts. In the south section the visitors noticed the numerous 
movable bridges, some fifty of them, quite a few of which folded up or 
raised in a manner novel to many of the sightseers. Chicago extends 
along Lake Michigan for twenty miles and the automobile trip afforded 
an unusual opportunity to traverse the picturesque lake front. More 
than passing attention was given to the site of the World's Columbian 
Exposition, several buildings of which are still standing. 

Bernard Singer, local consul from Nicaragua, presided at a luncheon 
given by the Pan American Consular Association of Chicago. The 
distinguished visitors met financial and commercial Chicago at a 
banquet given by the city, the Chicago Association of Commerce, 
the Chicago Clearing House Association, the Illinois Manufacturers' 
Association, the Illinois Bankers' Association, and the Chicago 
Board of Trade. The speakers on this important occasion were 
Hon. Edward F. Dunne, governor of Illinois, Hon. William Hale 
Thompson, mayor of Chicago, George M. Reynolds, president of 
the Continental and Commercial National Banks, Dr. Perez Triana, 
and Hon. Andrew J. Peters, the Assistant Secretary of the Treasury. 
John J. Arnold, vice president of the First National Bank of Chicago, 
was the toastmaster. 

A tour was made the next morning of the Union Stockyards, where 
centers the five-stock and packing industry, which covers an area of 
nearly 500 acres. Meat packing is the greatest local industry and is 
that for which Chicago is best known. In the enormous stockyards 
from two-thirds to four-fifths of the cattle and hogs received are 
killed, and sent out in various forms of prepared meats and by- 
products, such as lard, fertilizers, glue, soap, candles, and so on. 
The introduction of the refrigerator railway car in the seventies, 
making possible the distant marketing of dressed meats, enormously 
increased the business. 

There was a specially conducted trip through the larger packing 
houses and afterwards the visitors were guests at a luncheon at the 
Saddle and Sirloin Club with the following packing concerns as hosts; 
Sulzberger & Sons, Armour & Co., Morris & Co., Swift & Co., and 
Libby, McNeil & Libby. At night there was an informal dinner 
at the Chicago Athletic Association. 

DETROIT. 

Easily most spectacular in its particular way was the visit to the 
Ford automobile factory. Here our neighbors to the south became 
so interested at the rapidity with which finished automobiles were 
turned out of the plant that — with watch in hand — they saw three new 
machines come down the runway each minute — one every twenty sec- 
onds. It seemed unbelievable to them that a single company could 



TRIP MADE BY THE DELEGATES. 499 

turn out more than three hundred thousand automobiles in the short 
space of a year. Possibly nowhere does the visitor have a greater 
opportunity to study the automobile than in Detroit. There are 
thirty-four automobile manufacturing concerns in this city alone, and 
during the year automobiles of the market value of $400,000,000 
will be manufactured here. 

It was a source of wonder that such a delicate and comparatively 
small mechanical device — an almost human mechanism — the Bur- 
roughs adding machine, should be housed in factory buildings 
occupying two cit} 7 " blocks, with a floor space of seven ane one-half 
acres. One of these intricate little machines is produced every ^.Ye 
minutes. Henry Ford, of the Ford Automobile Co., and Joseph 
Boyer, president of the Burroughs Adding Machine Co., were hosts at 
luncheon at the Detroit Athletic Club. Afterwards some of the party 
availed themselves of an invitation to visit the large drug plant of 
Parke, Davis & Co., where the visitors manifested great interest in 
the machines which were turning out millions of medichial pills a 
day. The party then gathered on the company's lawn and while 
partaking of a buffet luncheon prepared for them by this firm, wit- 
nessed a fire drill by the Parke, Davis & Co.'s own fire company and 
also an exhibition fire drill by the fire boats on the river. From the 
lawn the party had a splendid view of the Canadian side of the river 
and the automobile manufacturing plants which line the banks. 

Beneath outstretched wings of the American eagle, and with the 
walls and tables decorated with the flags of the Americas, the party 
was banqueted by the Detroit Board of Commerce. Hon. Edwin 
Denby, a former member of Congress, introduced Charles B. Warren, 
president of the board of commerce, who acted as toastmaster. 
Dr. Aristides Arjona, Secretary of Finance and Treasury, of Panama, 
and Hon. William Alden Smith, senior United States Senator from 
Michigan, were among the speakers. 

NIAGARA FALLS. 

En route from Detroit to Niagara Falls it was necessary to pass 
through a portion of Canada. When the visitors awoke in the 
morning they saw real signs of war. Canadian troops were seen 
guarding power houses and bridges. Every precaution was being 
taken against an enemy. Once arrived at Niagara Falls, those who 
had not visited there before were eager to acquaint themselves with 
the scene of the historic "A. B. C." mediation meetings. 

It was an ideal day, from an atmospheric standpoint, and few, if 
any, of the party were absent when the special trolley cars arrived 
for a closer inspection of the Falls and a trip over the Royal Gorge 
route, affording a superb view of the rapids below the Falls on both 
the American and Canadian sides of Niagara River. 



500 PAN" AMERICAN FINANCIAL CONFERENCE. 

A first-hand view of the harnessing of Niagara Falls was presented 
when the party left the cars to visit a portion of the plant of the 
Niagara Falls Power Co. To-day, twenty-five years after the breaking 
of ground for the first tunnel diverting water from Niagara River above 
the Falls, the aggregate amount of power developed by the Niagara 
Falls Power Co. and its allied interest, the Canadian Niagara Power 
Co., is about 175,000 horsepower, with additional capacity in course 
of construction amounting to 50,000 horsepower. Less than seven per 
cent of the total flow of water over Niagara has been diverted by 
these companies, they claim, and the beauty and grandeur of the 
Falls are unimpaired. Most of the electrical power generated is 
consumed in the vicinity of the Falls proper, but Buffalo, twenty-two 
miles away, takes it for city railroad and other power purposes. 
Another immense plant visited was that of the Hydraulic Power Co. 
There was a luncheon given by the Niagara Falls Chamber of 
Commerce. 

BUFFALO. 

As guests of the Buffalo Clearing House Association, the party was 
taken by automobile from Niagara Falls to Buffalo. Besides varying 
the railroad travel, a splendid opportunity was afforded in seeing one 
of the most important commercial ports of the Great Lakes, a city 
which owes its prosperity to commerce. Fifteen steamship lines 
make Buffalo their terminus; innumerable independent vessels ply 
to the chief ports on the Great Lakes. With a season of only about 
246 days in the year, Buffalo ranks with large American and Euro- 
pean ports in extent of traffic. The Buffalo street railways were 
among the first to adopt electric traction and the system of free 
transfers. 

The automobiles took the guests directly to the Buffalo Country 
Club, passing through the mammoth park which was the scene of the 
Pan American Exposition, a most interesting feature of the ride to 
our Latin-American guests. At the country club the party partook 
of a generous buffet luncheon and were afforded an opportunity for 
an hour's rest before returning to the city through the beautiful parks 
and residential sections of Buffalo. 

Leaders in finance and business attended the formal dinner at the 
Buffalo Club. Hon. Herbert P. Bissell, Justice in the New York 
Supreme Court, was the toastmaster. Gen. Leopoldo Cordova, 
Minister of Finance of Honduras, spoke at length. His remarks were 
greeted with enthusiasm by the diners. 

SCHENECTADY. 

When the travelers awoke in the morning electric locomotives had 
replaced those of steam, and their train was finally parked in the 



TRIP MADE BY THE DELEGATES. 501 

heart of the General Electric Works, said to be the largest plant of its 
kind in the world, an establishment which at times gives employment 
to as many as 20,000 employees. The gigantic works had taken on a 
gala air. There was an impromptu reception upon arrival. High 
officials of the company personally guided the visitors through as large 
a portion of the plant as the limited time permitted. What a physi- 
cal task a complete tour would present may be realized when it is 
told that the ground area is something upward of 300 acres; one build- 
ing alone has a total floor space of 490,000 square feet. There are 
other plants located throughout the country. The company's busi- 
ness for a recent year, it is said, amounted to $112,000,000. 

Of interest to the foreign visitors was the first large Curtis steam- 
turbine generator. It had a capacity of 5,000 kilowatts. When 
installed in Chicago twelve years ago it was the largest steam turbine 
in existence. However, after six years' service it was replaced by 
a Curtis steam-turbine generator of larger capacity. Of the many 
products of the company which the visitors saw in course of con- 
struction were turbines, generators, motors of all kinds, arc and 
incandescent lamps, and electric mining and railway locomotives. 

There was a warm welcome for the Pan American party. The 
brass band — composed entirely of General Electric employees — had 
given a special concert. As the Pan American Special slowly pulled 
out there was a final serenade, and thousands of workmen joined in 
waving a farewell. 

BOSTON. 

At Boston there was a fitting and handsome climax to the trip. 
Everything for the comfort and convenience of the now pretty 
well tired-out visitors had been thought out most carefully. After 
giving plenty of time for dinner— no formal function having been 
arranged, so that the travelers might have a good rest to begin 
with — there was a delightful popular music ("Pop," it is known 
as in Boston) concert given by the Boston Opera Company Orches- 
tra. Here the Central and South American guests were joined by 
another distinguished company of visitors, the Chinese Merchants 
Commission, which also happened to be in Washington at the time 
of the Pan American Conference. 

Each guest had been asked to write on a card the thing in Boston 
he desired to see most. Accordingly, the next morning was devoted 
to personally conducted tours. Many visitors availed themselves of 
an opportunity to view the historic city of Boston from the tower of 
the new customhouse. The city has an ordinance limiting the 
height of buildings to 125 feet, so consequently is not as abundantly 
supplied with skyscrapers as other places. However, the customs 
tower, built by the Government and exempt from local ordinances, 



502 PAN AMERICAN FINANCIAL CONFEEENCE. 

rises to a height of 325 feet. The central tower, with its pyramidal 
top, furnishes not only a notable landmark but an unusual viewpoint. 

There was an invigorating automobile drive of some 30 miles along 
the north shore of the ocean to North Beverly, where Mrs. John C. 
Phillips and Mrs. Andrew J. Peters served tea to the party. Pos- 
sibly nowhere in this country are there more ideal roads for motoring 
than among these beautiful country estates. Lynn, with its great 
factories, and Salem so rich in history and still showing traces of a 
recent conflagration, were passed en route. Also Beverly, where 
during the administration of President Taft the summer capital of 
the United States was located. 

Then there was the farewell banquet. Attended by the junior 
Senator of the United States from Massachusetts, Mr. Weeks, the 
governor, Mr. Walsh, the mayor, Mr. Curley, and the president of 
Harvard University, Dr. Lowell, it was a notable event. Secretary 
Peters said good-by to the visiting guests. Dr. Perez Triana, of 
Colombia, and Mr. Vergara Bulnes, of Chile, responded. Mr. Zayas, 
formerly the Cuban consul general at New York, in the name of the 
visitors, presented Mr. Peters with a gold clock on which was engraved 
the Spanish word for " Remembrance " as a token of parting esteem. 
Admiral Cordeira da Graca, of Brazil, "proposed a toast to the health 
of the President of the United States. 

The guests were the next (and last) day of the trip given the priv- 
ilege to be the first ones to inspect the handsome new library at 
Harvard University erected in memory of Harry Elkins Widener, who 
was lost on the Titanic. Dr. Lowell, the president of Harvard, person- 
ally conducted the party through the building. There followed a 
reception by the former Ambassador to Japan and Mrs. Larz Andersen 
at "Weld," in Brookline, one of the finest estates in that section of 
the country. Afterwards a luncheon was served at the Country Club. 
An hour later the guests boarded their special train for the last time. 
There was a fast run to New York City, where the guests arrived at 
9 o'clock Sunday evening. Farewells were said en route and the 
successful trip was at an end. 

MEMBERS OF THE OFFICIAL PARTY. 

Hon. Andrew J. Peters, of Washington, D. C, Assistant Secretary of 

the Treasury. 
Hon. William F. Sands, of Washington, D. C, formerly United States 

Minister to Guatemala, Assistant Secretary General of the Pan 

American Financial Conference. 
Mr. Horace M. Gillman, of Washington, D. C, assistant to Mr. Peters. 
Brazil : 

Admiral Cordeira da Graca, of the Brazilian Navy. 



TRIP MADE BY THE DELEGATES. 503 

Chile: 

Senor Dr. Luis Izquierdo, former Minister of Foreign Affairs. 

Seflor Dr. Augusto Villanueva ; director general of the Bank of 
Chile. 

Senor Dr. Gonzalo Vergara Bulnes, a prominent corporation 
lawyer. 
Guatemala: 

Senor Dr. Juan S. Lara, a banker. 

Senor Dr. Rafael Aparicio, a prominent coffee planter. 
Colombia : 

Senor Dr. Santiago Perez Triana, formerly Minister to Great 
Britain. 

Senor Dr. Santiago Perez Triana, jr. 

Senor Dr. Gabriel Llopis, secretary to Don Santiago Perez Triana. 
Honduras : 

Senor Dr. Leopoldo Cordova, Minister of Finance. 

Senor Dr. Daniel Fortin, former Minister of the Hacienda and 
Public Credit. 
Nicaragua : 

Senor Dr. Pedro Rafael Cuadra, former Minister of Finance. 

Senor don Pedro Joaquin Cuadra. 
Panama : 

Senor Dr. Aris tides Arjona, sr., Secretary of Finance and Treasury. 

Senor don J. E. Arjona. 

Senor don Aristides Arjona, jr. 

Senor Dr. Ramon Arias Ferand, director of the Canal Zone Bank. 
Ecuador: 

Senor Dr. Enrique Gallardo, consul general at New York. 

Senor Dr. Vicente Gonzales B., a prominent business man. 
Cuba: 

Senor Dr. Porhrio Franca Alvarez de la Campa, chief director of 
the National Bank of Cuba. 

Senor Dr. Octavio Zayas y Adan, prominent banker in Cuba, and 
formerly consul general at New York. 
Dominican Republic: 

Senor Dr. Francisco J. Peynado, former Minister at Washington. 



504 PAN AMERICAN FINANCIAL CONFERENCE. 

PAN AMERICAN UNION. 

Mr. Williani A. Reed, representing the Pan American Union of 
Washington, D. C. 

PRESS ARRANGEMENTS. 

Mr. Robert D. Heinl, of the Chamber of Commerce of the United 
States, in charge of press arrangements for the Secretary of the 
Treasury. 

Mr. Earl Godwin, of the Washington Star, assistant in charge of 
press arrangements. 

WASHINGTON CORRESPONDENTS ACCOMPANYING THE PARTY. 

Associated Press, Robert Dougan. 
International News Service, Mr. Kendrick Scofield. 
New York World, Mr. Isaac Gregg. 
Christian Science Monitor, Mr. Alfred Pitman. 

OFFICIAL STENOGRAPHER. 

Mr. Joseph L. B. Chisholm, of Cambridge, Mass., detailed from the 
Treasury Department, 

SECRETARY INTERPRETERS. 

Senor Salvador Martinez de Alva. 
Senor Luis Rivera Rosas. 

IN CHARGE OF TRANSPORTATION. 

Mr. Hugh Hassen, of Philadelphia, special passenger agent, Pennsyl- 
vania Railroad. 
Mr. J. J. Good, of Philadelphia, special baggage agent. 



CABLEGRAM SENT BY THE PRESI- 
DENT OF THE UNITED STATES TO 
THE PRESIDENTS OF THE LATIN 
AMERICAN COUNTRIES REPRE- 
SENTED AT THE PAN AMERICAN 
FINANCIAL CONFERENCE AND 
REPLIES THERETO 

505 



CABLEGRAM SENT BY THE PRESIDENT OF THE UNITED 
STATES TO THE PRESIDENTS OF THE LATIN AMERICAN 
COUNTRIES AND REPLIES THERETO, REPRESENTED AT THE 
PAN AMERICAN FINANCIAL CONFERENCE. 



[the president's cablegram.] 

Washington, D. C, June H, 1915. 
Impressed with the outcome of the Conference of American Finan- 
ciers, it is especially gratifying to me to express to Your Excellency 
the appreciation of this Government, and my own thanks, for the 
material aid lent to the success of the Conference by the distinguished 
gentlemen it was your pleasure to send as delegates of your Govern- 
ment and our honor to receive them as guests of this Nation. The 
patriotic and intelligent labors of this Conference of leading men 
from our sister Republics of Central and South America will, I feel 
assured, bear early and beneficial fruits and lead to increased mutual 

prosperity. 

Woodrow Wilson. 

[replies.] 
ARGENTINA. 

Buenos Aires, June 16, 1915. 
His Excellency Woodrow Wilson, 

President of the Vnited States, Washington, D. C: 
I have been most agreeably impressed by the dispatch in winch 
Your Excellency expresses to me your favorable opinion regarding 
the results achieved by the Pan American Financial Congress. I 
share the opinion of Your Excellency and confidently believe that 
the labors of the assembly will prove highly beneficial to the solidarity 
of the American Republics, stimulating the economic bonds necessary 
for their mutual development. It is a source of special satisfaction 
to me to know that the work of the Argentine delegates has merited 
the kind approval of Your Excellency. 

V. de la Plaza. 

BOLIVIA. 

La Paz, Bolivia, June 16, 1915 
His Excellency the President of the United States, 

Washington , D. C: 
In reply to the cablegram in which Your Excellency is good enough 
to communicate your favorable impressions as to the success of the 
Pan American Financial Conference, called through the happy initia- 
tive of the Government over which Your Excellency so worthily pre- 
sides, I have the honor to express my thanks for the cordial welcome 

507 



508 PAN AMERICAN FINANCIAL CONFERENCE. 

extended by Your Excellency and by your enlightened Government 
to the delegation of Bolivia, and to give utterance to the confident 
belief I entertain as to the wholesome influence which the labors of 
the Conference, intelligently carried out, will have on the relations 
and common prosperity of the three Americas. 

Ismael Monte s. 
BRAZIL. 

Kio de Janeiro, June 18, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
I received with very real pleasure Your Excellency's telegram on 
the occasion of the closing of the Pan American Financial Conference 
and thank Your Excellency for the hospitality accorded the dele- 
gates of Brazil. I congratulate Your Excellency most warmly on 
the success of the labors of the Conference, which, I feel, assured, will 
produce early and profitable results and concur toward the greater 
prosperity of all the American Republics. 

Wenceslao Braz P. Gomes. 

CHILE. 

Santiago, Chile, June 2, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
On behalf of the Government of Chile, I take pleasure in offering 
your excellency my most sincere congratulations for the success of the 
Pan American Financial Conference, recently held in Washington, 
and at which resolutions of such vast moment to the commercial and 
economic development of the nations of America were adopted. My 
Government is most sensible of the courtesies extended to the delegates 
of Chile to this Conference. 

Ramon Barros Luco, 
President of the Republic of Chile. 

COLOMBIA. 

Bogota, June 19, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
I am much gratified to learn that your excellency is pleased with 
the success of the Pan American Financial Conference of Washington, 
and with the part taken therein by the delegates of Colombia. I 
tender your excellency my cordial thanks for the warm welcome given 
the delegation of Colombia and for the generous hospitality it received 



CABLE CORRESPONDENCE. 509 

at the hands of your excellency's Government. I trust that the 
results of the Conference will be in keeping with the noble wishes of 
your excellency and will further the prosperity of all the nations of this 
continent. 

Jose Vicente Concha. 

COSTA RICA. 

San Jose, June 16, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
Profoundly grateful for the kind sentiments which Your Excel- 
lency has been so good as to express to me in your courteous cable- 
gram of to-day, I feel highly gratified at the brilliant success of the 
Conference so opportunely initiated by Your Excellency, for the 
purpose of bringing about in a practical manner the development 
and expansion of our commercial relations. 

Alfredo Gonzalez. 
CUBA. 

Habana, June 15, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
On acknowledging receipt of Your Excellency's cordial and cour- 
teous message permit me to thank you on behalf of my Government 
and in my own name for the highly appreciated reception given to the 
delegates of this Government to the Conference of American Financiers. 
It is most gratifying to me to know that our delegates lent their mate- 
rial aid to the success of the Conference, and I trust that the work 
rendered by the distinguished delegates from all the American Repub- 
lics will bring about a closer commercial relation and an era of greater 
prosperity for all of them. 

Mario G. Menocal. 

SANTO DOMINGO. 

Santo Domingo, June 16, 1915. 
His Excellency Woodrow Wilson, 

President of the United States, Washington, D. C: 
I am grateful for the expressions of your favorable impressions 
regarding the aid lent by our delegates to the Financial Congress, 
and I entertain the hope that the countries lying between the Behring 
and Magellan Straits may derive great advantages from it and thus 
increase their prosperity. 

J. I. Jimenez, 
President of the Dominican Republic. 



510 PAN AMERICAN FINANCIAL CONFERENCE. 

ECUADOR. 

Quito, June 16, 1915. 
His Excellency Woodrow Wilson, 

President of the United States, Washington, D. C: 
My Government, in sending its delegates to the Conference of 
American Financiers, felt certain that it would bear great fruit in 
estabhshing closer commercial relations among the nations of our. 
continent. The favorable impressions of Your Excellency on the 
results attained are highly gratifying to me, and it is a very great 
pleasure to offer your Nation and Your Excellency's Government 
the gratitude of the people and Government of Ecuador for the gen- 
erous hospitality shown our delegates. 

Leonidas Plaza. 

GUATEMALA. 

Guatemala, June 17, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 

Impressed also by the words of encouragement contained in Your 
Excellency's esteemed cable message of the 15th instant, I take 
pleasure in expressing to you my sincere acknowledgment and 
gratitude for the kind and generous reception which the Government 
of that great and prosperous nation saw fit to accord to the persons 
designated by Guatemala to attend the American Financial Conference 
recently held in Washington. I likewise take special pleasure in 
expressing my sincere congratulations to the Government and people 
of the United States for the success attained by the Conference and 
for the beneficial results which, we believe will, beyond doubt, soon 
flow from it and lead to increased mutual prosperity. My Govern- 
ment and people were highly honored by Your Excellency's kind 
invitation to Guatemala to take part in the Conference, and I share 
Your Excellency's good wishes that patriotic and intelligent labor 
of the nature referred to may crown its work, and thus bring about 
an extension of commerce and of the magnificent relations which, 
in this respect unite the countries of North, Central, and South 
America. 

With feelings of high regard, I am, 
Your Excellency's true friend, 

Manuel Estrada Cabrera. 



CABLE CORRESPONDENCE. 511 

HONDURAS. 

Tegucigalpa, Honduras, June 16, 1015. 
His Excellency the President of the United States, 

Washington, D. C: 
An honor, no less than a pleasure, was it to receive the courteous 
cablegram in which Your Excellency so kindly expressed fitting 
and noble thoughts on the Pan American Financial Conference, 
recently held in that Capital. The Government of Honduras views 
with great pleasure the brilliant success which has attended the 
praiseworthy initiative of Tour Excellency in calling the American 
Republics together in a meeting from which we confidently expect 
the most fruitful results. For these reasons I pray Your Excellency 
to accept my very warm felicitations and most cordial wishes for 
the closer relationship and prosperity of all the nations of the 
continent. 

F. Bertrand. 

NICARAGUA. 

Managua, Nicaragua, June 16, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
I have the honor to acknowledge Your Excellency's cordial and 
expressive telegram of yesterday on the outcome of the Conference 
of American Financiers. We have looked upon the Conference as a 
promise of the most gratifying consequence for the prosperity and 
closer friendship of all the nations of America. I deem it a pleasure 
as well as a duty to convey to that nation and to Your Excellency 
the warm appreciation and thanks of this Government, to which I 
gladly join my own, for the generous hospitality extended to our 
delegates and for the interest shown in the Conference which, as 
Your Excellency so fittingly expresses, will yield early and beneficial 
fruits to our mutual prosperity. 

Adolfo Diaz. 
PANAMA. 

Panama, June 15, 1915. 
His Excellency the President of the United States, 

Washington. 
I cordially appreciate the cablegram of Your Excellency, and am 
most happy to know that Your Excellency considers that the dele- 
gates of Panama to the Financial Congress rendered valuable assist- 
ance in the great work conceived by the illustrious and just Govern- 
ment of Your Excellency for the establishment of closer relations 
between the great American Republic and her sisters of the same 
continent. Permit me to express to you my deep gratitude for the 



512 PAN AMERICAN FINANCIAL CONFERENCE. 

exquisite hospitality extended on this occasion by the Government 
of Your Excellency to the delegates of Panama and of the sister 
Republics who had the honor to take part in the Conference. 

Belisario Porras. 
PARAGUAY. 

Asuncion, Paraguay, June 25, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
On my return from a trip across my country, I had the pleasure 
to read the telegram in which Your Excellency expresses gratification 
for the success of the recent Pan American Financial Conference, and 
manifests appreciation of the aid lent by the delegates of Paraguay. 
In thanking Your Excellency for these courteous expressions, I avail 
myself of the opportunity to utter the very sincere wish that the 
results of the Conference will be fruitful in the establishment of closer 
friendly relations and in the creation of economic and financial ties 
among our sister nations. 

Eduardo Schaerer, 

President of the Republic. 
PERU. 

Lima, Peru, June 16, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
Having read the attentive telegram with which Your Excellency 
has honored me to-day, I feel the most complete satisfaction in know- 
ing that the delegates from Peru to the Pan American Financial Con- 
gress have worthily fulfilled the instructions and intentions of my 
Government. For my part I am very grateful for the splendid recep- 
tion which Your Excellency and your Government have been so good 
as to extend to the delegates, and I am certain that results beneficial 
to all the countries of America will be derived from the happy initia- 
tive of Your Excellency in calling a conference which in cementing 
the spirit of Pan American solidarity marks a new era in the eco- 
nomic development and prosperity of the continent. 

General Benavides, 

President of Peru. 
SALVADOR. 

San Salvador, June 16, 1915. 
His Excellency the President of the United States, 

Washington, D. 0.: 
I have the honor, in reply to the kind cablegraphic dispatch of 
Your Excellency, dated yesterday, to convey to Your Excellency the 
thanks of the Government of Salvador and my own for your kind 



CABLE CORRESPONDENCE. 513 

appreciations, as well as for the courtesies dispensed by Your Excel- 
lency's illustrious Government to the delegates of this Republic to 
the Financial Congress while guests of your cultured nation. 

In voicing the sincere hope that the success of the Conference, 
held under the auspices of Your Excellency's Government, may cor- 
respond to the lofty motives which inspired its inception, I avail 
myself of this exceptional opportunity to renew to Your Excellency 
the assurances of my high and distinguished consideration. 

Carlos Melendez. 
URUGUAY. 

Montevideo, June 15, 1915. 
His Excellency the President of the United States, ' 

Washington: 
It is with true pleasure that I acknowledge the receipt of the 
telegram of Your Excellency relating to the American Financial Con- 
gress which has just closed with such brilliant success. The coopera- 
tion furnished by the Uruguayan Government has been an affirmation 
of the solidarity of interests and objects which exists among the 
American countries and a recognition of the prestige and spirit of 
initiative of the Government of the Union. I am glad to share the 
opinion of Your Excellency that the work of the Conference must 
bear beneficial fruits for the American countries. Permit me to add 
to these sentiments my wishes for the prosperity of the United States 
and for the happiness of Your Excellency. 

Feliciano Viera, . 
President of the Republic, 

VENEZUELA. 

Caracas, June 27, 1915. 
His Excellency the President of the United States, 

Washington, D. C: 
With pleasure do I respond to the cordial message which Your 
Excellency addressed to me in connection with the Conference of 
American Financiers held at Washington. I trust that the final 
results of this Conference, which was promoted and patronized by 
Your Excellency's noble Government, will be worthy fruits of the 
high practical talent characteristic of the great descendants of Wash- 
ington, and I am sure that these mutual benefits, while being factors 
of prosperity, will also constitute a new and strong bond of solidarity 
between the sister Republics of this continent. In the name of 
President-elect General J. V. Gomez, of the Venezuelan Government, 
and in my own, I thank you for the splendid hospitality which Your 
Excellency extended to the representatives of Venezuela. 

V. Marquez Bustillos. 

98257°— 15 33 



LETTER FROM THE SECRETARY 
OF THE TREASURY TO THE 
DELEGATES REGARDING THE FU- 
TURE OF THE WORK INITIATED 
BY THE CONFERENCE 



515 



LETTER FROM THE SECRETARY OF THE TREASURY TO 
EACH DELEGATE REGARDING THE FUTURE WORK OF 
THE CONFERENCE. 



Washington, D. C, July 19, 1915. 

Gentlemen : As you are about to leave for your homes, permit me 
to take this opportunity of saying au revoir and wishing you a safe 
and pleasant journey. I hope that you take with you happy recol- 
lections of your visit to the United States. I also hope that you are 
convinced that the work of the first Pan American Financial Con- 
ference is certain to produce results mutually advantageous to our 
respective countries. 

The thorough interchange of views has disclosed many obstacles 
now existing to the extension of trade and finance among all the 
American nations and has clearly indicated the remedies for many 
of these difficulties. I feel certain that you are determined to persist 
in the work so auspiciously begun by the Conference until the largest 
measure of practical results has been obtained. 

In order that there may be no cessation in the work we have un- 
dertaken, I want to beg of you to submit to your Government the fol- 
lowing suggestions: 

1. ANNUAL PAN AMERICAN FINANCIAL CONFERENCE. 

The Conference demonstrated conclusively to my mind that it 
will be of immense advantage to all the Republics of the American 
Continent to hold an annual Pan American Financial Conference in 
Washington. I am going to ask the President of the United States 
to strongly recommend this to the next session of the United States 
Congress and ask for a sufficient appropriation to carry on the work. 
I am sure that the Congress of the United States will act favorably 
upon this suggestion. I respectfully request that you make a similar 
recommendation to your Government. I have suggested that the 
city of Washington be made the place of meeting for the annual 
sessions of the Pan American Financial Conference merely because 
I think that it is, on the whole, the most convenient place therefor, 
and that it is possible to secure a larger attendance of our important 
financiers and business men in Washington than elsewhere. More- 
over, the Pan American Union has a beautiful building in Wash- 
ington, where all the necessary facilities for the Conference can be 

517 



518 PAN AMERICAN FINANCIAL CONFERENCE. 

obtained. It is also important, I think, to have the Pan American 
Financial Conference cooperate with the Pan American Union. I 
shall be glad, however, if you will frankly inform me whether you 
think it would be better to hold the financial conference at some 
other place than Washington. 

2. INTERNATIONAL HIGH COMMISSION ON UNIFORM LEGISLATION. 

I earnestly recommend that the minister of finance of your country 
appoint at the earliest possible moment the nine members of the 
international high commission proposed in the report of the com- 
mittee on uniform legislation. I inclose several copies of that 
report. 

In order that this high commission may have the status to which 
its importance and dignity entitle it, I think that the minister of 
finance of each country should himself accept the chairmanship of 
the commission in his country. This suggestion has been made to 
me from many quarters, and I think it is an admirable one. The 
Secretary of the Treasury of the United States will act as chairman 
of the commission for the United States. If the ministers of finance 
of the several countries will adopt this suggestion, the commission 
will at once have a prestige and dignity which will add much to its 
effectiveness. The high commission of each country should promptly 
organize and appoint a secretary general, who should at once assume 
the duties of his office and get into communication with the high 
commissions appointed by the several countries. 

There should be a meeting of the international high commission 
as early as possible at some suitable place in Central or South Amer- 
ica. I would suggest the city of Buenos Aires as being the most 
convenient point for this purpose, and that the date for the meeting 
be the 1st day of November, 1915. This date would be very appro- 
priate for the members of the United States commission, as it will 
be about one month before the next session of the United States 
Congress, which convenes on the 6th of December, 1915. Thus an 
opportunity would be given to submit to that session of the United 
States Congress the conclusions reached by the international high 
commission. 

It is, of course, essential that the work of the several high com- 
missions be coordinated and have general direction from some 
common point. I would suggest that until there can be a meeting of 
the international high commission as proposed, the secretary general 
of the United States commission act temporarily as secretary gen- 
eral for the international high commission, and I shall be greatly 
obliged if the minister of finance of each country will cable me as 
soon as possible if this suggestion is acceptable to his country. 



SECRETARY OF THE TREASURY ON WORK OF CONFERENCE. 519 

The secretary general of the United States commission will have 
his headquarters in the United States Treasury Department at 
Washington, and will be immediately under the direction of the 
Secretary of the Treasury of the United States. Every effort will 
be made to keep in touch with the general situation and to arrange 
for the meeting of the international high commission when a perma- 
nent organization can be effected. I shall greatly appreciate it if 
the minister of finance of each country, will cable me at the Treasury 
Department in Washington the names of the members of the high 
commission for his country as soon as they are appointed, in addi- 
tion to the name of the secretary general, and state whether the city 
of Buenos Aires is agreeable for the first meeting of the interna- 
tional high commission, and if November 1 is acceptable as the date 
for said meeting. 

Each high commission should, as soon as appointed, take up and 
consider carefully the report made by the committee on uniform 
legislation to the Pan American Financial Conference, dated May 
29, 1915, copies of which are inclosed, and should send to the secre- 
tary general, Treasury Department, Washington, D. C, the fullest 
possible information as to the extent to which the recommendations 
of the committee on uniform legislation above referred to are re- 
garded favorably by their Governments, together with any sugges- 
tions they have to offer. 

I would also respectfully urge upon your Government the im- 
portance of making such provision as may be necessary to give the 
high commission an official status and standing, and also for the 
making of a reasonable appropriation to enable the high commis- 
sion of each country to carry on its work. I shall beg the President 
of the United States to make similar recommendations to the Con- 
gress of the United States, and I am satisfied that there will be no 
difficulty in securing from the Congress of the United States the 
necessary appropriation for this purpose. The creation of an inter- 
national high commission is certain to produce advantageous results 
in all the countries concerned. I respectfully urge upon you the 
importance of these suggestions and beg that you will express to 
your Government my hope that it will take early and favorable 
action thereon. 

3. PERMANENT GROUP COMMITTEES. 

Much of the success of the Conference resulted from the division 
of the representatives of the United States into 18 group committees, 
one of which was assigned to the delegation from each of the visiting 
countries, thus bringing about a group conference between the dele- 



520 PAN AMERICAN FINANCIAL CONFERENCE. 

gates of each country and a committee of representative financiers 
and business men of the United States, with a resulting interchange 
of views at close range and under conditions where the problems of 
each country were intimately discussed and the difficulties in the 
way of more extended trade, commerce, and intercourse between 
them were developed and the remedies therefor ascertained and 
considered. It is clear that it will be to the interest of all concerned 
if these group committees shall be continued. It is my purpose, 
therefore, to appoint a group committee in this country to which 
will be assigned the specific duty of keeping in touch with the dele- 
gates from your country, and of acting as the medium in the United 
States; through which you may secure reliable information or submit 
matters for the consideration of financiers, merchants, or manufac- 
turers in the United States. This committee, will, of course, have no 
official status but will act as a voluntary organization for the purpose 
of fostering closer financial and commercial relations between our re- 
spective countries. The group committees now appointed will serve 
until the convening of the Pan American Financial Conference of 
1916, unless sooner relieved from further service by the Secretary 
of the Treasury of the United States. 

I would suggest that the delegates from your country continue as 
a group committee for your country, so that, in like manner, our busi- 
ness men and financiers may be able to apply to you for reliable in- 
formation concerning matters affecting business or finance in your 
country. 

4. THE IMPERATIVE NECESSITY FOR THE PROMPT ESTABLISHMENT OF 
INCREASED AND IMPROVED STEAMSHIP COMMUNICATION BETWEEN 
THE LEADING PORTS OF LATIN AMERICA AND THE UNITED STATES. 

It was the unanimous opinion of the Conference that improved 
ocean transportation facilities between the leading ports in South 
and Central America and the United States are of vital importance. 
The Conference unanimously adopted the following resolution : 

Resolved, That it is the sense of this Conference that improved ocean trans- 
portation facilities between the countries composing the Pan American Union 
have become a vital and imperative necessity, and that every effort should be 
made to secure at the earliest possible moment such improved means of ocean 
transportation, since it is of primary importance to the extension of trade and 
commerce and improved financial relations between the American Republics. 

As you doubtless know, a bill was introduced in the last Congress 
of the United States, and almost became a law, authorizing the Gov- 
ernment of the United States under certain prescribed conditions to 
establish steamship lines to Latin America. A copy of that bill is 



SECRETARY OF THE TREASURY ON WORK OF CONFERENCE. 521 

inclosed. Doubtless the Congress at its forthcoming session, in De- 
cember, 1915, will give renewed consideration to this important 
matter. It would be very helpful if you would, at the earliest prac- 
ticable moment, supply me with the following information : 

(a) Between what port or ports in your country and what port 
or ports in the United States do you consider it most essential to 
provide additional steamship facilities? 

(b) How frequent should the sailings be? 

(c) What should be the speed, gross tonnage, and general char- 
acter of the ships for the proposed service to make them thoroughly 
competitive with the ships operated between European countries and 
the leading ports in your country? 

(d) What are the passenger rates for first and second cabin and 
for steerage between your principal port and the principal port of 
Great Britain, France, Germany, and Italy? 

(e) What, in your judgment, should be the passenger rates for 
first and second cabin and steerage between your principal port and 
the city of New York, between your principal port and the city of 
New Orleans, between your principal port and the city of San Fran- 
cisco? What are the present rates between those points? 

(/) Give the cargo rates on your chief articles of export and 
import between your principal port and the principal port of Great 
Britain, Germany, France, and Italy prior to the outbreak of the 
European war. Please give the same information as to cargo rates 
between the same ports at the time of your reply to this inquiry. 

(g) What were the cargo rates on your chief articles of export 
and import between your principal port and the ports of New York 
and New Orleans in the United States prior to the outbreak of the 
European war? Please give the same information as to cargo rates 
between the same ports at the time of your reply to this inquiry. 

(A) Give the approximate amount of steam tonnage operating be- 
tween your principal port and the principal port of Great Britain, 
Germany, France, and Italy for a period of six months prior to the 
outbreak of the European war. What percentage of this tonnage 
was under British registry ; what percentage under German registry ; 
what percentage under French registry; what percentage under 
Italian registry; and what percentage under the United States reg- 
istry? Give the same information for the six months prior to the 
date of your reply to this inquiry. 

(i) Please give the amount of steam tonnage between your leading 
port and the cities of New York, New Orleans, and San Francisco 
for six months prior to the outbreak of the European war. What 
percentage of this tonnage was under British registry; what per- 



522 PAN AMERICAN FINANCIAL CONFERENCE. 

centage under German registry ; what percentage under French reg- 
istry; what percentage under Italian registry; and what percentage 
under the United States registry? Give the same information for 
the six months prior to the date of your reply to this inquiry. 

(j) Please state whether or not cargo rates between your leading 
port and the ports of New York, New Orleans, and San Francisco 
in the United States are, in normal times, higher than to competitive 
ports in Great Britain, Germany, France, and Italy. Please give a 
detailed comparative statement of such rates. 

(7c) State what are the chief disadvantages under which commerce 
between your country and the United States is suffering because of 
these higher rates ; to what extent such commerce is suffering because 
of inadequate and insufficient steamship service between your country 
and the leading ports of the United States. Please give any other 
information bearing upon this important question which will make 
the problem clearer, and give me your suggestions as to what is 
necessary in the way of specific steamship service to overcome these 
disadvantages and to promote trade and commerce between your 
country and the United States. 

(I) Please state what undue burdens are placed upon steamship 
companies in the ports of your country in the way of port charges, 
restrictive or burdensome navigation laws, etc., and whether or not 
these burdens can be removed. 

(m) Please state what favoring laws your Government is willing 
to enact or what encouragement your Government is willing to give 
to a steamship company or companies which will establish improved 
steamship facilities between your leading port and the leading port 
or ports of the United States. 

(n) In the event that it should be deemed advisable for the Gov- 
ernments concerned to furnish the capital for the operation of steam- 
ship lines between your country and the United States, to what extent 
and in what manner would your Government be willing to assist in 
establishing and operating such steamship facilities? 

(o) What difficulties exist in the way of direct cable communica- 
tion between your country and the United States? Give comparison 
of cable rates between your chief city and New York City, London, 
Berlin, Paris, and Rome. 

(p) Please give me your suggestions as to how the need of suffi- 
cient cable communications between your country and the United 
States may be most easily remedied, and to what extent and in what 
manner your Government would be willing to join with the United 
States in the establishment of direct cable lines. 



SECRETARY OF THE TREASURY ON WORK OF CONFERENCE. 523 

5. IMPROVED POSTAL FACILITIES BETWEEN THE UNITED STATES AND LATIN - 

AMERICAN COUNTRIES. 

The Postmaster General of the United States has asked me to 
request you to submit to your Government the following information : 

The Postmaster General of the United States, under date of October 17, 1914, 
addressed to the postal authorities of each of the countries and colonies of the 
Western Hemisphere to which our domestic letter rate did not then apply a 
proposal on the part of this Government to enter into conventions establishing 
a 2-cent letter rate — the domestic rate — from the United States to those coun- 
tries, if they would agree that letters coming from their countries to the United 
States should bear their domestic rate. This offer upon the part of the United 
States postal administration still stands and it is intended in the near future 
to again address a communication to each country renewing the offer. 

There is now pending an offer to enter into a convention for the exchange of 
money orders 'with each country of Central and South America with which we 
do not now transact such business, with the exception of two, namely, Guate- 
mala and Venezuela, which at this time have no domestic money-order system, 
and consequently could not exchange remittances in that form with the United 
States. It is the purpose of the Postmaster General to renew in the near future 
the invitation which he has extended to the countries referred to to enter into 
money-order exchange conventions with this country as early as practicable. 

The Postmaster General of the United States is also examining the terms of 
the parcel-post conventions in force between the United States and the several 
countries of Central and South America, with a view to removing all obstacles 
that it is practicable to remove in the way of restrictions embodied in such 
conventions which interfere with the freedom of transmission of parcels, etc. 

The things above indicated are those which the Postmaster General of the 
United States is anxious to do and have done in order to bring about better 
postal relations between this country and the respective countries of Latin 
America with a view to increasing the trade relations between the countries of 
the Western Hemisphere for their mutual advantage. 

I hope that the suggestions of the Postmaster General will receive 
due consideration on the part of your Government. Improved 
postal facilities between our respective countries is one of the essen- 
tials to improved financial and commercial relations. 

I shall send to you, as soon as printed, a full report of the pro- 
ceedings of the First Pan American Financial Conference. 
Believe me, gentlemen, with warm regards and best wishes, 

Faithfully, yours, 

W. G. McAdoo. 



PERMANENT COMMITTEE 
APPOINTMENTS MADE BY 
THE SECRETARY OF THE 
TREASURY 



525 



PERMANENT COMMITTEE APPOINTMENTS. 



INTERNATIONAL HIGH COMMISSION. 



David R. Fkancis, 

St. Louis, Mo. 

E. H. Gary, 

Chairman of Board, United 
States Steel Corporation, 
New York City. 

A. B. Hepburn, 

Chairman Board of Directors 
Chase National Bank, 
New York City. 

George M. Reynolds, 

President Continental and 
Commercial National Bank, 
Chicago, 111. 

Samuel Untermyer, 
37 Wall Street, 
New York City. 

Leo S. Rowe, Secretary General. 
J. Brooks B. Parker, Assistant Secretary General. 
Constantine E. McGuire, Assistant to the Secretary General. 

SPECIAL COMMITTEE IN CHARGE OF THE VISIT OF AMERICAN 
FINANCIERS AND BUSINESS MEN TO SOUTH AND CENTRAL 
AMERICA. 



William Gibbs McAdoo, Chair- 
man, 

Secretary of the Treasury, 
Washington. 

John Bassett Moore, Vice Chair- 
man, 

Columbian University, 
New York City. 

John H. Fahey, 

President Chamber of Com- 
merce of the United States, 
Boston, Mass. 

Duncan U. Fletcher, 

President Southern Commer- 
cial Congress, 
Jacksonville, Fla. 



James A. Farrell, Chairman, 
President United States Steel 
Corporation, 
New York City. 

John Barrett, 

Director General Pan Ameri- 
can Union, 

Washington. 

D. P. Black, 

President Chamber of Com- 
merce, 

Pittsburgh, Pa. 

John Clausen, 

Crocker National Bank. 
San Francisco, Cal. 



D. Y. Cooper, 

Cotton Manufacturer, 
Henderson, N. C. 

G. A. Davidson, 

President Panama-California 
Exposition, 

San Diego, Cal. 

Duncan U. Fletcher, 

President Southern Commer- 
cial Congress, 

Jacksonville, Fla. 

Elliot H. Goodwin, 

Secretary Chamber of Com- 
merce of the United States, 
Washington. 

527 



528 



PAN AMERICAN FINANCIAL CONFERENCE. 



S. M. Hastings, 

President Illinois Manufac- 
turers' Association, 
Chicago, 111. 
S. T. Henry, 

Vice President McGraw Pub- 
lishing Co., 
New York City. 
W. S. Kies, 

55 Wall Street, 

New York City. 
Daniel Kelleher, 

Seattle, Wash. 
A. L. Mills, 

President First National 
Bank, 

Portland, Oreg. 
Charles G. Moore, 

Panama - Pacific Interna- 
tional Exposition, 
San Francisco, Cal. 



Walter Parker, 

General Manager New Or- 
leans Chamber of Com- 
merce, 
New Orleans, La. 

EoBERT H. PATCHIN, 

Secretary Foreign Trade 
Council, 
New York City. 

James J. Shirley, 

Of F. A. Gillespie Co., 
New York City. 

Willard Straight, 
23, Wall Street, 

New York City. 

Edwin Warfield, 

President Fidelity Trust Co., 
Baltimore, Md. 



PERMANENT GROUP COMMITTEES. 



ARGENTINA. 



Willard Straight, Chairman, 
23 Wall Street, 
New York City. 
James A. Farrell, 

President United States Steel 
Corporation, 
New York City. 



Henry Ford, 

President Ford Motor Co., 
Detroit, Mich. 
Cyrus McCormick, 

International Harvester Co. 
Chicago, 111. 



Frank A. Vanderlip, 

President National City Bank, 

New York City. 



BOLIVIA. 



Joseph P. Grace, Chairman, 
Of W. E. Grace & Co., 
New York City. 
W. F. Bippus, 

Treasurer National Cash 
Eegister Co., 
Dayton, Ohio. 



J. F. O'Neil, 

President Fulton Iron Works, 
St. Louis, Mo. 
Charles M. Pepper, 

Washington, D. C. 



George H. Richards, 

Foreign Department, Eemington Typewriter Co., 

New York City. 



PERMANENT COMMITTEE APPOINTMENTS. 
BRAZIL. 



529 



John Hays Hammond, Chairman, 
71 Broadway, 

New York City. 



J. B. Forgan, 

President First 
Bank, 

Chicago, 111. 



National 



Frederico Lage, 

Mechanics & Metals National 
Bank, 
New York City. 
E. W. Rice, 

President General Electric 
Co., 
New York City. 



Mortimer L. Schiff, 

Of Kuhn, Loeb & Co.. 

New York City. 



chile. 



Charles H. Sabin, Chairman, 
President Guaranty Trust 
Co., 
New York City. 

Robert Bacon, 

1 Park Avenue, 

New York City. 

John J. Raskob, 

Treasurer E. I. Du Pont de Nemours Powder Co., 

Wilmington, Del. 



G. L. Duval, 

Of Wessel, Duval Co., 
New York City. 

David Kinley, 

University of Illinois, 
Urbana 111. 



COLOMBIA. 



George W. Norris, Chairman, 
Philadelphia, Pa. 

Morris Coster, 

Foreign sales manager West- 
inghouse Co., 
New York City. 



W. R. Shepherd, 

Columbia University, 
New York City. 

Wallace D. Simmons, 
St. Louis, Mo. 



R. Lancaster Williams, 
Baltimore, Md. 



COSTA RICA. 



J. W. Earle, Chairman, 

President Remington Type- 
writer Co., 
New York City. 

G. A. Aerts, 

Rudolph Wurlitzer Co., 
Cincinnati, Ohio. 



John Crosby, 

Washburn- Crosby Co., 
Minneapolis, Minn. 

Minor C. Keith, 

President United Fruit Co., 
New York City. 



Walter Parker, 

General Manager New Orleans Chamber of Commerce, 

New Orleans, La. 

98257°— 15 34 



530 



PAN AMERICAN FINANCIAL CONFERENCE. 



CUBA. 



F. Q. Brown, Chairman, 
Of Kedmond & Co., 
New York City. 

Paul Fuller, 

Of Coudert Bros., 
New York City. 



Fairfax Harrison, 

President Southern Ry. Co.. 
Washington. 



G. C. Taylor, 

President American Express 
Co., 
New York City. 

James Speyer, 

Of James Speyer & Co., 

New York City. 

DOMINICAN REPUBLIC. 



Prof. Jacob H. Hollander, 

Chairman, 

Johns Hopkins University, 
Baltimore, Md. 



Charles E. Falconer, 

President Merchants & Man 
ufacturers Association, 
Baltimore, Md. 

David H. G. Penny, 

Vice president Irving National Bank, 

New York City. 



Frederick B. Jennings, 

Of Stetson, Jennings & Rus- 
sell, 
New York City. 

W. H. Marshall, 

Of American Locomotive Co., 
New York City. 



ECUADOR. 



Joseph H. O'Neil, Chairman, 
Federal Trust Company, 
Boston, Mass. 

Frederick H. Eaton, 

President American Car & 
Foundry Co., 
New York City. 

E. M. Herr, 

President Westinghouse Elec- 
tric & Manufacturing Co., 



East Pittsburgh, Pa. 



F. I. Kent, 

Vice President Bankers' Trust 
Co., 
New York City. 

W. H. Lipe, 

Vice President Beech Nut 
Packing Co., 

Canajoharie, N. Y. 

J. G. White, 

Of J. G. White & Co., 
New York Citv. 



GUATEMALA. 



David P. Francis, Chairman, 
St. Louis, Mo. 

John Clausen, 

Manager, foreign department 

Crocker National Bank, 

San Francisco, Cal. 



Alba B. Johnson, 

President Baldwin Locomo- 
tive Works, 
Philadelphia, Pa. 

J. Ruperti, 

Of Amsinck & Co., 
New York City. 

William E. Woodin, 

Of American Car & Foundry Co., 

New York City. 



PERMANENT COMMITTEE APPOINTMENTS. 



531 



HONDURAS. 



John S. Armstrong, Chairman, 
Baltimore, Md. 

Owen Gathright, 

Vice President Harbison & 
Gathright, 

Louisville, Ky. 



W. E. Manning, 

Secretary Youngstown Sheet 
& Tube Co., 

Youngstown, Ohio. 

Samuel Sachs, 

Of Goldman, Sachs & Co., 
New York City. 

H. B. Thayer, 

President Western Electric Co.. 

New York City. 



NICARAGUA. 



W. L. Saunders, Chairman, 

President Ingersoll-Eand Co. 
New York City. 

James Brown, 

Of Brown Bros., 
New York City. 



George H. Numsen, 

President National Canners' 
Association, 
Baltimore, Md. 

Sol Wexler, 

President Whitney Central 
National Bank, 
New Orleans, La. 



Professor Jeremiah W. Jenks, 
New York University, 
New York. 



PANAMA. 



S. L. Schoonmaker, Chairman, 
American Locomotive Works, 
New York City. 

Nelson A. Gladding, 

Vice President E. C. Atkins 
& Co., 
Indianapolis, Ind. 



Thomas F. Crean, 

Of Remington Typewriter 
Co., 
New York City. 

H. K. Mulford, 

President H. K. Mulford Co., 
Philadelphia, Pa. 



E. G. Ehett, Charleston, S. C. 



PARAGUAY. 



Lewis E. Pierson, Chairman, 
President Austin, Nichols & 
Co., 
New York City. 

Charles Muchnic, 

Foreign Sales Department, 
American Locomotive Co., 
New York City. 

EOBERT H. PATCHIN, 

Secretary National Foreign Trade Council, 
New York City. 



Egbert F. Maddox, 

Of American National Bank, 
Atlanta, Ga. 

John E. Morron, 

President Atlas Portland 
Cement Co., 
New York City. 



532 



PAN AMEKICAN FINANCIAL CONFERENCE. 



PERU. 



John H. Fahey, Chairman, 

President Chamber of Com- 
merce of the United States, 
Boston, Mass. 

Koger W. Babson, 

Boston, Mass. 



William Btjtterworth, 
President Deere & Co., 
Moline,Tll. 



William Loeb, Jr., 

American Smelting & Refin- 
ing Co., 
New York City. 
C. D. Mitchell, 
Chattanooga Plow Co., 
Chattanooga, Tenn. 

SALVADOR. 



W. S. Rowe, Chairman, 

President First National 
Bank, 
Cincinnati, Ohio. 
T. H. Given, 

President Farmers' Deposit 
and National Bank, 
Pittsburgh, Pa. 



Elliot H. Goodwin, 

Secretary Chamber of Com- 
merce of the United States, 
Washington, D. C. 

George S. Mahana, 

Of Corn Products Refining 
Co., 
New York City. 



Eugene P. Carver, 
Boston, Mass. 



URUGUAY. 



Harry A. Wheeler, Chairman, 
Vice president Union Trust 
Co., 

Chicago, 111. 

A. M. Harris, 

President Harris Trust & 
Savings Bank, 
Chicago, 111. 



W. S. Kies, 

Of National City Bank, 
New York City. 

E. P. Thomas, 

President United States 
Steel Products Co., 
New York City. 



Danhol G. Wing, 

President First National Bank, 

Boston, Mass. 



VENEZUELA. 



H. G. P. Deans, Chairman, 

Manager foreign department 
Merchants Loan & Trust 
Co., 

Chicago, 111. 

E. A. de Lima, 

58 West Sixth Street, 
New York City. 

William P. Wilson, 

Director Commercial Museum, 

Philadelphia, Pa. 



W. C. Potter, 

Of Guaranty Trust Co., 
New York City. 

I. N. Seligman, 

Of J. & W. Seligman, 
New York City. 



GENERAL MEMORANDA 



533 



MEMORANDUM SUBMITTED BY DR. R. C. ALDAO, ARGENTINE 
DELEGATE, IN SUPPORT OF THE DRAFTS OF RESOLU- 
TIONS PRESENTED BY HIM TO THE CONFERENCE 
ON UNIFORMITY OF COMMERCIAL LAW, MARI- 
" TIME TRANSPORTATION, AND THE CREATION 
OF AN INTERNATIONAL COMMITTEE OF 
COMMERCIAL ARBITRATION 



535 



MEMORANDUM SUBMITTED BY DR. R. C. ALDAO, ARGENTINE 
DELEGATE TO THE PAN AMERICAN FINANCIAL CONFERENCE, 
IN SUPPORT OF THE DRAFTS OF RESOLUTIONS PRESENTED BY 
HIM TO THE CONFERENCE ON UNIFORMITY OF COMMERCIAL 
LAWS, MARITIME TRANSPORTATION, AND THE CREATION OF 
AN INTERNATIONAL COMMITTEE OF COMMERCIAL ARBITRA- 
TION. 



The Pan American policy fostered by the United States and from 
which so many benefits may be expected by the Kepublics of Amer- 
ica is completing its evolution. 

The action of this policy was limited until a short time ago to the 
maintenance of relations tending principally to the furnishing of 
reciprocal information among the countries making up the Pan 
American Union. 

It may perhaps be said that it was not until 1914 that this policy 
of continental solidarity attained its first practical success by ren- 
dering possible the mediation of Argentina, Brazil, and Chile, which 
brought to a happy close the grave situation created by the differences 
between the Government of the United States and Victoriano Huerta 
of Mexico. 

This conference which has brought together the representatives of 
almost all the Latin American Eepublics for the consideration of 
financial and commercial matters, constitutes the most efficient in- 
itiative toward obtaining results mutually advantageous. 

The development of public wealth and its establishment upon a 
solid basis by facilitating the realization of individual welfare is 
what gives an impulse to and marks the route to be followed by the 
international policy of the nations whose progress must serve as an 
example to the young Republics of America. And it is for this rea- 
son that, as an act of strict justice, sincere applause should be ex- 
tended to the Secretary of the Treasury, the initiator of this con- 
ference. 

In so doing, the Argentine delegation is gratified to look upon it 
as an augury of a new and fruitful era in the Pan American policy. 

537 



538 PAN AMERICAN" FINANCIAL CONFERENCE. 

GENERAL REMARKS. 

The economic prosperity of the Latin Republics of America, in my 
opinion, calls for the concurrent action of three main factors : 

a) The regulated increase of their population by the incorpora- 
tion of men capable of cultivating and making productive the exten- 
sive area of agricultural lands, now sterile owing to a scarcity of 
population. 

b) The permanent or at least long-time investment of more capi- 
tal, permitting the development of their industries, the establishment 
of easy internal and external communications, and the increase of 
banking facilities called for by the development of international 
commerce. 

c) The widening of their commercial radius of action by the in- 
crease of the markets for their products and by the attraction of 
offers of manufactures of foreign industry, for the purpose of im- 
proving the conditions governing the sale of their domestic produc- 
tion and the purchase of manufactured goods to supply their own 
consumption. 

With reference particularly to my own country — the Argentine 
Republic — I would say that the first point mentioned is not yet of 
urgent importance in the relations which bind Argentina together. 
The immense population of the United States does not as yet exceed 
the productive capacity of her territory, and therefore there can not 
be expected for the present the establishment of a regular current of 
North American immigration to the shores of Argentina. 

But it is to be expected that before the lapse of many }^ears the 
colossal development of the United States will direct thoughts to- 
ward the advisability of promoting the emigration of those who are 
unable at the time to find easily means of livelihood owing to the 
overflowing population. 

And it is also to be hoped that then — in that future which I ven- 
ture to trust is very near — the American emigrant will consider it 
advantageous to transfer his work and capacity to Argentina, where, 
with similar conditions of climate, fertile lands which fully com- 
pensate the efforts devoted to their cultivation, and all the con- 
veniences attendant upon the most complete civilization, the ener- 
getic man will find as adequate if not greater reward for his labor 
than in any other part of the world. 

Permit me incidentally to call attention to the fact that Argentina 
has unoccupied lands for sale or lease of sufficient area to amply com- 
pensate the labor of a population tenfold her present population, and 
that those lands are suitable for the cultivation of all the products 
of any climate. Taking only the ten national territories of which the 
Argentine Republic consists, apart from the fourteen confederated 



MEMORANDUM BY DR. R. C. ALDAO. 539 

Provinces, they have at the present time a total area of 81,825,000 
hectares, or 202,000,000 acres of excellent land, the property of the 
Government of the Nation, destined to be leased or sold for private 
exploitation under exceptionally favorable conditions by the immi- 
grant coming to Argentina with the capacity and energy necessary 
to work out his future. 

Permit me also to call attention to the fact that in Argentina the 
laws governing immigration are liberal and extend to the immigrant 
extraordinary facilities for becoming the owner of the land he tills ; 
and that the extensive works of irrigation which have been in course 
of construction for a number of years, the first-class port accommoda- 
tions, and an excellent railway service covering over 34,000 kilometers, 
admits of the successful intensive cultivation of select fruits and 
vegetables at a profit exceeding that obtainable in the most prosper- 
ous agricultural section of the world. 

In order better to appreciate the productive capacity of Argentina 
and the intense and efficient labor found there, attention may perhaps 
be called to the fact that that country, with a population of only 
about 9,000,000, all of the Caucasian race, last year exported cereals 
and other agricultural products to an amount in excess of 400 millions 
of American bushels, in addition to large quantities of chilled and 
frozen meats, wool, hides, tallow, and other products of the cattle 
industry, the total sale price of which exceeded 500 millions of 
dollars. 

May I be permitted, then, to contemplate as a happy prospect for 
my country the hope that when the already enormous population of 
the United States shall have increased to the point of absorbing the 
supporting capacity of its soil, it will be Argentina to which Amer- 
ican emigrants will transfer their homes in the search for a com- 
mensurate reward for the efforts of their intelligence and their 
labors. 

MUTUAL CONFIDENCE. 

With respect to the problems of a financial and banking character, 
of so much interest to the prosperity of my country, they will be 
treated in this conference by my colleague on this delegation and 
distinguished friend, Mr. Samuel Hale Pearson, while I, on my part, 
will confine myself more particularly to that which relates to the 
fuller development of the commercial relations between the United 
States of America and the Argentine Republic. 

In discharging the task with which my Government has honored 
me, I shall seek to set forth as concisely as possible the present state 
of the commercial relations involved and the measures of a practical 
character which, in my judgment, might be employed to further the 



540 PAN AMERICAN FINANCIAL CONFERENCE. 

full attainment of the ends had in view in carrying out the happy 
idea of holding this conference. 

I believe that the concurrence of two essential elements is neces- 
sary to an increase of international commerce : That the contracting 
parties have mutual confidence in each other and that both expect 
the legitimate profit inherent in every commercial transaction. 

It is unnecessary to say anything in regard to the second of these 
elements, inasmuch as the price from which the profit is to be derived 
is a consequence of the eternal law governing the offer, and the de- 
mand which does not admit of any regulation altering its natural 
consequences. 

But, on the other hand, mutual confidence admits of encourage- 
ment, in order to convince the party with whom a contract is entered 
into, that it is entered into with that good faith which should always 
be paramount in a commercial transaction. 

In all parts of the world there are dishonest merchants, and it is 
particularly for the purpose of avoiding the consequences of their 
improper conduct that it is advisable to adopt measures of a legal 
character to defend those whose conduct is above reproach. 

Furthermore, I have personally, in a professional capacity, had 
opportunity to observe certain deficiencies in the commercial laws in 
force in the Argentine Republic and in some of the states of your 
country, which do not favor as they should the situation of the mer- 
chant who sells on credit to customers residing abroad. 

I likewise believe that it would be advisable to recommend the 
enactment of legal measures granting the vendor of merchandise a 
lien thereon for its price as long as the merchandise continues in the 
possession of the purchaser and can be identified, to which end the 
removal by the purchaser of the trade or other marks whereby the 
manufacturer distinguishes his products should be punished as a 
fraud. 

It would also be advisable to save international commerce the 
delays, expenses, and sundry difficulties arising as a consequence of 
differences in contracts of an international character, which force the 
vendor or purchaser to have recourse to the ordinary courts of a 
foreign and distant country. 

It is in pursuance of these ideas that I have permitted myself to 
draft, for submission to the consideration of the conference, the 
project of a resolution recommending to the respective Governments 
the adoption of certain measures tending to inspire and maintain 
confidence between the merchants of this country and Argentina, 
and another project providing for the establishment of an interna- 
tional committee of commercial arbitration, to operate in New York 
and in Buenos Aires, for the purpose of settling equitably and 
promptly, without judicial proceedings, without stamped paper, and, 



MEMORANDUM BY DE. R. C. ALDAO. 541 

if possible, even without the intervention of lawyers, any differences 
arising throug 
two countries. 



arising through commercial transactions between the residents of the 



INTERNATIONAL TRADE. 

I believe that from their respective points of view the interests of 
the American manufacturer and the Argentine consumer are very 
similar and it is to their mutual advantage to support each other. 

The aim of the American manufacturers, now that their ordinary 
outlet to Europe has to a certain extent become reduced, must be to 
increase the number of their customers elsewhere in order to be able 
to dispose of the excess of their production which formerly went 
abroad, and also of the possible excess of their production for do- 
mestic consumption. On the other hand, the Argentine consumer is 
vitally interested in obtaining more competition in the offer of goods 
he is now purchasing, with the hope of obtaining better quality and 
lower prices. 

This is perhaps a good opportunity of letting American, manu- 
facturers know that the local Argentine trade is by no means in the 
hands of Argentinians. 

The import trade of Argentina is principally in the hands of the 
English, Germans, French, Italians, Belgians, and Spaniards (the 
volume of trade each is doing probably being in the order stated), 
who, as may be readily understood, prefer to deal with the manu- 
facturers of their respective native countries. 

I wish to state that in these last few words the situation is plainly 
summarized, and they explain why American industry, which can 
produce almost anything of the best quality and with the best work- 
manship and material, has not as yet been able to obtain in many 
lines the trade done by its European competitors. 

The United States exports to Argentina but a very small propor- 
tion of certain manufactured articles which their industry produces 
in abundance and which are consumed in Argentina in great quan- 
tities. 

Woolen textiles, clothing and underwear, shoes, hats, furniture, 
railroad and tramway supplies, galvanized sheet iron, manufactures 
of iron and steel, iron pipes, sanitary supplies, kitchen utensils, glass 
and crystal ware, automobiles, pianos and other musical instruments, 
as well as numerous other products of American industry, are im- 
ported from the United States to my country in very small propor- 
tional amounts. It is to be noted as a characteristic case that al- 
though Argentina is the greatest coal-consuming country in the 
world in relation to her population, spending no less than $40,000,000 
gold per annum for that commodity, American coal the production 
of which is far in excess of domestic needs, does not figure in any 



542 PAN AMERICAN FINANCIAL CONFERENCE. 

amount worthy of mention among the countries supplying us with 
that article of prime necessity. 

In order to change this state of affairs in favor of the American 
manufacturer and the Argentine consumer, it is necessary to estab- 
lish American wholesale importing houses in Buenos Aires and some 
of the other principal cities of Argentina, and it is for these firms 
to see about getting orders from the Argentine retail dealers, and in 
turn give their orders to their own people. 

The American local houses should endeavor to become thoroughly 
acquainted with the needs and demands and customs of the retail 
trade and with local conditions generally, in order that they may be 
in a good position to advise the home manufacturers of what the 
Argentine public wants. 

Another, and perhaps easier and more practical form, would be to 
establish in Buenos Aires one or more large stores for the exhibi- 
tion and sale of American products. This would put the American 
manufacturer in more direct touch with the Argentine consumer. 

The American manufacturers of products which find an easy sale 
in Argentina should make the necessary financial arrangements to 
establish in Buenos Aires the American exhibition suggested, where, 
under the direction of clever salesmen acquainted with local needs 
and tastes, American industry could easily compete with European 
manufacturers, who have heretofore almost monopolized some of 
the largest lines of the Argentine market. 

I might say that there is not the slightest reason why, on similar 
terms, the Argentine consumer should not buy from the American 
manufacturer rather than from the European. Quality and low 
price are the principal factors in Argentina, as they are in all other 
parts of the world, and these are the very simple ways by which 
the Argentine consumer can be reached. 

I wish to state most emphatically that there is no prejudice 
in Argentina against American products or American manufac- 
turers, business being merely a question of price, and, of course, 
the meeting of local conditions. And if it were necessary to dissipate 
any doubt which may still remain in this particular, it will be suffi- 
cient in order to do so to call attention to the fact that the Argentine 
Government, after having called for and received bids from the 
principal shipbuilding companies of England, Germany, France, 
and Italy, decided to intrust to the American naval industry, which 
presented the best terms, the construction of the two powerful vessels 
of 28,000 tons each for a contract price of $25,000,000 gold, and 
which, under the names of Rivadavia and Moreno — glorious in the 
history of Argentina — were recently added to the navy of my 
country. 



MEMORANDUM BY DE. E. C. ALDAO. 543 

But you must always bear in mind that the primary need is for 
American products to become known to the Argentine consumers; 
and when this has once been accomplished, there is no doubt at all in 
my opinion that the Argentine consumer will readily appreciate the 
products placed before him by the manufacturers of the great Ke- 
public of the North. 

FAST MARITIME SERVICE. 

One of the most important problems relating to the increase of 
business relations between the United States and Argentina is that 
which refers to maritime communication. 

It is not with a purpose of criticism, but merely to mention a pat- 
ent fact, that I wish to say that for 25 years past the duration of 
the trip between Buenos Aires and Europe has been IT days, and 
even less, while the voyage between Buenos Aires and New York 
can not be made at the present time in less than 22 days, and it fre- 
quently happens that correspondence between the two ports is not 
received until 25 or even 30 days have passed. 

And, nevertheless, for the proper development of business rela- 
tions between this country and Argentina, it is essential to establish 
and maintain a regular service of fast steamers furnishing travelers 
comforts equal to those which have been furnished for a long time 
back by the European lines. 

I think that everybody will agree that, under ordinary circum- 
stances, a fast maritime service can be obtained only as a natural 
consequence of an increase in passenger and freight traffic. And 
I regret to have to say that, in my judgment, the maritime traffic 
between this country and Argentina has not as yet attained sufficient 
importance to give a reasonable return on the capital which would 
have to be invested in order to establish the service in question. 

One of the greatest difficulties in the way of obtaining what is 
sought, is due to the lack of coal in Argentina, which fact compels 
steamers to purchase a part of their coal there with the additional 
cost of transporting said fuel from England, which is the country 
which supplies almost all the coal we consume. 

Another equally grave difficulty is due to the scarcity of return 
cargoes, inasmuch as the exportation of products of Argentina to 
the United States has been less than the importation of American 
products to Argentina ($26,863,732 of Argentine products as against 
$52,894,834 of American products during the past year), which has 
resulted in some of the vessels plying heretofore between the two 
countries not being able to secure sufficient cargo for their return 
trip. 

But I venture to predict that the two difficulties mentioned are 
destined to disappear in the not far distant future. 



544 PAN AMERICAN FINANCIAL CONFERENCE. 

In Argentina there have been recently discovered very important 
deposits of petroleum, the ownership of which the Government has 
retained and will not transfer. Their exploitation has already been 
started in such form that a production of liquid fuel of 200,000 
tons for the first year may be counted on in a few months, and which 
is destined in a few years more to attain proportions which will 
substitute a large part of foreign fuel. And I am certain that the 
Argentine Government would be glad to give preference in supply- 
ing fuel to the steamers taking charge of a fast maritime service of 
the first class between my country and the United States. 

On the other hand, the extraordinary increase in the population of 
this country, which is relatively greater than that of its production 
of food products, must have as a result a progressive and constant 
increase in the importation of such products from Argentina. It is 
a well-known fact that during the past few months the commerce 
of importation of Argentine meats has been initiated with excellent 
prospects and is destined in a short time to attain a notable develop- 
ment; and it is also to be expected that in the very near future 
American agriculture will not be able to produce certain cereals in a 
sufficient amount to provide for its own consumption, and it will 
then be that Argentine wheat, corn, and flax will be naturally im- 
ported to fill such needs. 

The present European war also furnishes an extraordinary oppor- 
tunity for increasing the importation of certain Argentine products 
which heretofore have been sent principally to some of the bellig- 
erent countries. 

This increase in the importation of Argentine products has been 
noted specially in hides; and it is very probable that American in- 
dustry will consider it advisable to import on a larger scale the wood 
called " quebracho, " which Argentina has heretofore sent in very 
large amounts to Germany for the extraction of the tannin used so 
successfully in the tanning industry. 

When these promising prospects become converted into facts the 
obstacles which are the main ones in the way of the establishment 
of the fast maritime service of which I am treating will have been 
surmounted. 

But it is a fact that the satisfaction of the need of a fast mari- 
time service affects so greatly the interest of both countries that it is 
probable that their Governments may consider that the opportunity 
has come for providing the means necessary for obtaining this 
result immediately and without awaiting it as a natural consequence 
of the increase in traffic. 

The President of the United States, when he delivered in the 
Pan American Union his address of welcome to the delegates of the 
Latin Republics, said very specifically that not only rapid means of 
shipping facilities with South America constitutes a public necessity, 



MEMORANDUM BY DR. R. 0. ALDAO. 545 

the discharge of which should not be delayed, but that also the 
Governments of the countries interested in it should give their 
assistance in every way possible, so that this may be accomplished 
without any further delay. 

I am satisfied that the men who govern my country are of the same 
opinion as that of your distinguished First Magistrate, and, in fact, 
it may be that this is an opportune occasion to remember that a 
policy of furthering or advancing the progress of the nation have 
precedents in the Argentine Kepublic, where the National Govern- 
ment has invested large sums in the building of railroads in the 
southern part of the country where the population is not sufficiently 
great to immediately bring a return on such investments, and where, 
consequently, it was not possible to induce private enterprise to take 
the business in hand. The only purpose of that initiative was the 
development of sections which are perfectly suited for agriculture 
or cattle raising, and which could not be undertaken owing to a lack 
of good communications with the ports. 

Therefore, in order to attain the result sought without too much 
delay, it would be essential for the two Governments interested that 
either to acquire with their own resources and manage the new fast 
steamers in question or that they compensate sufficiently any private 
companies desirous of taking charge of such fast service. 

The first form presents, in my opinion, grave inconveniences, as 
experience has demonstrated in other countries. The public admin- 
istration is not generally prepared to manage affairs of this char- 
acter; and, on the other hand, it would not be equitable for the 
Governments to themselves initiate a strong commercial competition 
against established- navigation companies which have up to the 
present met the necessities of international traffic as far as possible. 
I think that I can affirm that the Argentine Government will not con- 
sider it advisable to become the owner and manager of a commercial 
shipment concern. 

It is for this reason that I believe that compensation by the Gov- 
ernments to private enterprises is the most convenient form of 
attaining the result sought. 

I wish to note that I have employed the word " compensation " and 
not "subsidy," in order to avoid any misunderstanding regarding 
the idea I permit myself to advance. 

If a private company should establish a service of communications 
of the first class, enabling the voyage to be made between the United 
States and Argentina in 16, or perhaps 15 days, instead of 23, it 
would have to incur extra running expenses in fuel and personnel 
for a large amount, apart from the necessary large initial investment 
of capital; and that capital and those expenses would produce in 
favor of international commerce the most important benefit of 
98257°— 15 35 



546 PAN AMERICAN FINANCIAL CONFERENCE. 

bringing about the delivery of bills and other documents required 
by international exchange, of merchandise sent and received, and of 
the mail exchanged at their respective destinations, one week sooner 
than is the case at the present time, thus reducing by one-third the 
loss of time required to cover the distance which separates the two 
countries. 

It is therefore a question of obtaining positive benefits, and when 
compensation is given it should not be understood that a gratuity 
is offered to the navigation companies, but that adequate remunera- 
tion is given them for a service upon which they are fairly entitled 
to earn a proper return. 

It is in pursuance with these ideas that I have permitted myself 
to prepare for its consideration a project of resolution tending to 
meet the necessity so much felt in this country as well as in my own, 
of a service of maritime communication combining the conditions 
of speed and comfort called for by an increase in commercial rela- 
tions; and I am glad to say that said project has deserved the ap- 
proval of the delegations of Brazil and Uruguay who have agreed in 
its present wording. 

In the meantime, in order to overcome some of the present diffi- 
culties which maritime commerce encounters, I believe that it is 
urgently necessary for the Governments of the countries interested 
to adopt efficient measures to prevent the delays now often suffered 
owing to deficiencies in the consular, sanitary, and customs service 
which we have all had occasion to observe in traveling between 
Buenos Aires and New York. 

And I also believe that it would be most advisable that the Gov- 
ernments of the countries interested take the necessary steps to 
cheapen the cost of cable communication, as the most efficient means 
of overcoming as much as possible the difficulties inherent in the 
long distances which separate some of the Republics of America from 
each other, especially whilst the fast maritime service is, as it is at 
present, only a cherished hope. 

In this way I have attempted to summarize my small contribu- 
tion to the labors of the Pan American Financial Conference. In 
fulfilling my obligation toward the common task, may I be per- 
mitted to express my deepest appreciation to the Republics of 
America who have assembled their representatives for the purpose 
of considering and elucidating financial and commercial problems 
that affect their future prosperity. They are thus giving to the 
world the greatest example of brotherhood and culture, which is so 
much more worthy of praise if we recall that in some of the oldest 
European nations, who have heretofore been the leaders of civiliza- 
tion, it would now seem that even the most elementary principles of 
justice and humanity have been forgotten and even deliberately 
discarded. 



APPENDIX. 
GENERAL SUGGESTIONS. 



I. 

Suggestions on Pan American Uniformity in Matters Affecting 
the Development of International Commerce. 

1. The adoption of the 25-cent piece as a monetary unit for all the 
Republics of America. 

2. The obligatory establishment in all the Republics of America 
of the metric decimal system of weights and measures. 

3. The suppression in the United States of all import duties on 
food products of prime necessity. 

4. The establishment of the mutual exchange of parcel-post up to 
a weight of 5 kilograms. 

5. The making uniform of documents necessary in international 
commerce, such as bills of exchange, charter parties, and maritime 
bills of lading. 

6. The making imiform of consular, sanitary, and customs pro- 
cedure, saving vessels unnecessary delays in ports of transit or desti- 
nation. 

7. The grant to the vendor of merchandise a lien on the goods 
sold by him for the recovery of the price thereof while in the pos- 
session of the purchaser and while their identification is possible. 

8. Provision for the punishment as a fraudulent act the action of 
a purchaser who eliminates the trade or other marks of identifica- 
tion on the merchandise purchased by him, the price of which he 
has not yet paid in whole or in part. 

9. Prohibition and punishment as fraudulent of the pledge or 
pawn of merchandise the price of which has not yet been paid. 

10. The imposition upon the merchant of the obligation of enter- 
ing upon his books all details relating to the sale by him of merchan- 
dise the price of which he has not yet paid. 

11. The elimination from the customs laws of the so-called ad 
valorem duties, or the severe punishment of customs declarations by 
importers reducing the value of the merchandise imported. 

12. The regulation of the registry of trade-marks which are already 
registered and are well known in other countries. 

547 



548 PAN AMERICAN FINANCIAL CONFERENCE. 

II. 

Preliminary Draft of a Eesolution on International Commercial 

Arbitration. 

The Pan American Financial Conference, after due consideration, 
has resolved to recommend that, by mutual agreement between the 
Government of the United States of America and the Government 
of the Argentine Eepublic, measures be adopted tending to carry into 
effect the following agreement : 

Article 1. There is hereby established the International Committee of Com- 
mercial Arbitration for the purpose of furthering a more effective settlement 
of any differences arising in connection with the performance of commercial 
contracts of an international character. 

Akt. 2. The committee shall consist of two sections, one to be located in the 
city of New York and the other in Buenos Aires, to be called American Sec- 
tion and Argentine Section, respectively. Each section shall be composed of 
three regular members and three alternate members, of whom one regular mem- 
ber and one substitute member shall be appointed by the Chamber of Commerce 
of the United States, another regular and substitute member by the Chamber 
of Commerce of Buenos Aires, and the third regular and substitute members by 
agreement between the other two regular members. If no agreement can be 
reached, the appointment of the third member of each section and of his sub- 
stitute shall be made by the Chief Justice or President of the respective Na- 
tional Supreme Court. 

Art. 3. In order to be eligible to be a regular or substitute member of the com- 
mittee, it is necessary to be at least 30 years of age and to have been engaged 
in commerce in the respective country for a period of not less than five years. 
The term of office of the members shall be two years and they may be reelected. 
In case of absence, sickness, or some other impediment, the member of the com- 
mittee subject thereto shall be replaced by the proper substitute in the order of 
his appointment. Neglect in the discharge of his duties, failure in business, or 
any other cause affecting his position or standing shall operate to cause a 
member of the committee to cease in office, upon a declaration to be made by 
the Chamber of Commerce of the United States or the Chamber of Commerce 
of Buenos Aires, as the case may be. 

Art. 4. Each section of the committee shall have the power to decide any 
differences arising between residents of the United States and residents of the 
Argentine Republic in connection with the performance of commercial contracts 
of an international character. The place of performance of the respective con- 
tract shall be taken as establishing the section of the committee upon which it 
devolves to intervene in the case. 

Art. 5. There shall be submitted to the decision of the respective section of 
the committee all differences which may arise in connection with the per- 
formance of commercial contracts of an international character : 

(a) Between merchants who are adherents to the constitution of the interna- 
tional committee according to article 12. 

(6) Between parties who have so agreed, even though not adherents of the 
international committee. 

Art. 6. Merchants who, either by agreement or by reason of being adherents, 
are to submit their differences to arbitration by the committee shall forward 



MEMORANDUM BY DR. R. C. ALDAO. 549 

to the section of the latter at the place of the performance of the contract a 
duplicate of the contract and of all the correspondence exchanged in connection 
with the transaction in which the difference has arisen ; and shall, in addition, 
present all written or oral proof that the said section may require. The trans- 
mission of such copies and the presentation of the proof called for shall be made 
within a term to be fixed by the section. 

Art. 7. The definite decisions of the sections of the committee shall be 
adopted by a majority of the members composing them and must be entered in 
a book to be kept in the archives of each section. The proceedings had in con- 
nection with any arbitration, as well as the documents and evidence presented, 
shall be exempt from payment of any stamp or other tax. 

Art. 8. The arbitral judgment shall be rendered within the shortest period 
possible, according to the circumstances, and shall contain a concise decision of 
the case, setting forth what each party is to do, deliver, or pay to the other, with 
a determination of the period within which the judgment is to be satisfied. The 
judgment shall be communicated by registered letter to the party residing in 
the country where the arbitration has taken place, and by cablegram to the 
party residing in the other country. 

Art. 9. If either of the parties should fail to strictly fulfill the arbitral judg- 
ment rendered by either section of the committee, the latter shall, on petition 
of the other party, issue a signed copy of the judgment in question; and this 
copy shall serve as sufficient basis for the enforcement of the judgment in courts 
of justice by the proper summary process employed for the enforcement of the 
final judgments of such courts. 

Art. 10. The party who considers himself aggrieved by a final arbitral 
judgment shall have the right to appeal to the Chamber of Appeals in Com- 
mercial Matters of Buenos Aires, or to the equivalent court of New York, as 
the case may be; and such court shall decide the appeal without further pro- 
ceeding than the presentation of the written declaration of the appellant to 
be made within three days after being requested, and the answer of the 
appellee, to be filed within the next three days. This appeal may be inter- 
posed only after the appellant has fully satisfied the arbitral judgment, 
within the period fixed therein, and provided the appeal is interposed before 
the section which rendered the judgment within three days after the date 
it has been fully satisfied. 

Art. 11. Either section may order a merchant who has failed to carry out 
the arbitral judgment or who has failed to do what has been ordered in con- 
nection with an arbitration proceeding, to be deprived of the right to effect any 
American or Argentine customs transaction during such period as the section 
may establish, without prejudice to the execution of the judgment or of the 
order made. The same penalty shall be incurred by any third person who 
shall permit his name to be used for effecting any customs transaction in the 
interest of one who is deprived of the right of executing it by judgment of 
either section of the committee; and the collectors of the customhouses shall 
without further action fulfill the orders communicated to them by either 
section of the committee according to this provision. 

Art. 12. In order to be an adherent to the International Committee of Com- 
mercial Arbitration it is necessary : 

c) To be a merchant domiciled in the United States of America or in the 
Argentine Republic. 

&) To be presented as a person enjoying an excellent reputation by two mer- 
chants who are adherents or in some other form which the section may con- 
sider sufficient. 



550 PAN AMERICAN FINANCIAL CONFERENCE. 

c) To pay the adherence fee of $10 gold per annum, the amount of which 
may be increased or reduced by resolution of the committee. 

Abt. 13. Each member of the committee shall receive as compensation for his 

services a fixed salary of $ per annum. Each section of the committee 

shall decide the number of employees it requires, and shall fix the compensa- 
tion of each, as well as the sum necessary to cover its operating expenses. The 
respective general estimate shall be prepared by each section annually,, and 
in order to become effective shall require the approval of the executive power 
of the respective country. 

Aet. 14. Whenever the amount of the adhesion fees is insufficient to meet the 
expenses of the committee, the deficit shall be paid in equal parts by the coun- 
tries interested. 

Aet. 15. The committee shall adopt, according to the opinion of a majority of 
its members, expressed by letter or telegraph, all measures of common applica- 
tion for both sections, the purpose of which is to assure a more speedy and 
effective settlement of any differences arising between merchants of the two 
interested countries. 

Aet. 16. The Government of each interested country shall in due time pre- 
scribe the regulations for the execution of the law which may be enacted to 
carry into effect this convention and will establish all measures tending to the 
obtaining of good results. 



III. 

Project of Eesolution on Fast Mail Steamers Service. 

The Pan American Financial Conference begs to suggest the ad- 
visability of calling for bids not later than December 31, 1915, for 
the establishment of a regular line of fast mail steamers between 
New York, Eio de Janeiro, Montevideo, and Buenos Aires, under the 
following conditions: 

Steamers to have at least 10,000 tons displacement; to make at 
least two trips per month; with accommodations for at least 150 
first-class cabin passengers; with refrigerating arrangements; and 
to complete the trip between New York and Buenos Aires, pier to 
pier, in not more than 15 days. 

Bidders to state the compensation demanded and the period of 
the contract. 

As part of the compensation for services rendered said vessels to 
be exempt for five years from all fiscal charges in the respective 
countries and to enjoy all facilities granted to any other vessels. 

Bids to be acted upon within three months and preference to be 
given, all other conditions being similar, to whoever will provide 
for earlier inauguration of the service. 

The Governments of the respective countries to agree upon the 
proportionate charges to be paid by each, and upon all other details. 



MEMORANDUM ON THE FINANCES OF ARGENTINA 
SUBMITTED BY DR. SAMUEL HALE PEARSON 



551 



MEMORANDUM ON THE FINANCES OF ARGENTINA SUBMITTED 
BY DR. SAMUEL HALE PEARSON. 



Having been honored by my Government with, the appointment 
as a delegate of the Argentine Republic to the Pan American Finan- 
cial Conference, I have thought it might be of interest to all present 
to listen to a brief statement of the finances of my country, beginning 
from the earliest years of its independence. 

In order to make clear the financial situation of the Argentine 
Eepublic, I think it better to begin with the first operation of credit 
of any importance made by that country, which was a loan negotiated 
with Messrs. Baring Bros. & Co., of London, in the year 1823, bear- 
ing interest at the rate of 6 per cent and 2J per cent amortization, 
issued at 90 per cent. 

Shortly after this operation was realized the internal political 
troubles caused the suspension of interest and it was not until many 
years after, during the administration of our first President, Gen. 
Mitre, the Argentine Republic resumed the service on its debt, the 
holders of the bonds receiving their full capital and interest in new 
bonds. During the years 1883 to 1885 many of the Argentine Prov- 
inces issued loans with a view of establishing national banks under 
a special national law. A number of these States negotiated their 
loans in Europe, principally with French bankers, but owing to the 
crisis in 1890 the Provinces suspended service of interest on these 
loans, the country suffering at the same time during that year a great 
crisis, and although the National Government did their utmost under 
the Presidency of Dr. Pellegrini, one of our greatest statesmen, to 
continue the service in cash they could not do so. At that time 
our president, Dr. V. de la Plaza, was the financial advisor of the 
Argentine Republic in London, and under his advice the funding 
loan was issued to pay service in bonds instead of cash for five 
years. Before the expiration of that time the country renewed vol- 
untarily the normal service in cash of its entire debt. Shortly after 
the National Government decided, in the interest of the credit of 
the country, to make arrangements to assume the loans created by 
the Provinces, giving national bonds in exchange for the provincial 
bonds, and withdrew the loans issued by the different Provinces a 
few years previous. 

553 



554 PAN" AMERICAN FINANCIAL CONFERENCE. 

The same thing was done with the railway guaranties that under 
national laws were given special guaranties for the construction and 
equipment of their lines, but with the financial crisis of 1890 these 
guaranties were not punctually paid, and it was decided to treat this 
question in a radical way by computing the value of the guaranty 
and give to the railway 4 per cent national bonds. Fifty million dol- 
lars were created for this purpose and are known as national railway 
bonds, and thus completely reestablishing the credit of the Argentine 
Republic, which has been maintained during this long period with- 
out an interruption, notwithstanding the difficult moments experi- 
enced last year all over the world in consequence of the European 
Avar and thanks to the able way that our President, Dr. de la Plaza, 
has controlled the finances of the country. 

Nearly all of the loans made by the Argentine Eepublic were issued 
under the auspices of Messrs. Baring Bros. & Co., who have been the 
friends and bankers of my country from the beginning, and are 
likely to resume the same role as favorite bankers to Argentina so 
soon as normal conditions are resumed in Europe, as they have the 
sympathy of all the Argentines. Many of our principal loans were 
issued solely for the construction of railways, water and drainage, 
port works, and other improvements, all of which belong to the 
National Government and earn sufficient to pay the service. 

American bankers have had little direct negotiations with our 
country. Messrs. J. S. Morgan & Co., of London, issued a loan 
jointly with Messrs. Baring Bros. & Co., in 1886-87, and alone issued 
the funding loan of 1890. Said firm also had a large interest in one 
of our great railway companies, the Argentine Great Western Rail- 
way, which company was organized by them, and is now known as 
the Pacific Railways. 

The only direct loan contracted with American bankers was one 
for 10 millions of dollars made by the Province of Buenos Aires 
with Morton, Bliss & Co. in 1882, who took the whole amount 
cash. This loan, according to the statements of Don Pedro Agote's 
book on finance, was the first Argentine loan issued at par, and was 
brought out in the London market. This firm, afterwards the Mor- 
ton Trust Co., now the Guaranty Trust Co. of New York, I am 
pleased to say has continued its friendly relations and financial con- 
nections with our country, and was the only American banking con- 
cern who transacted important business until recently. Since the 
loan of 1882, the first financial operation of any importance nego- 
tiated with the United States banks was an advance for a short 
period of $15,000,000 made last year by the National City Bank of 
New York and its associates, and the new issue made a few days ago 
by said bank and its associates for a further amount of $25,000,000. 



MEMOEANDUM BY DR. SAMUEL HALE PEAESON. 555 

The primary object was for the purpose of retiring the first advance 
of $15,000,000, being part of a loan of $50,000,000, of which Messrs. 
Baring Bros. & Co., of London, issued the other half in London. 
With this loan for five years, a number of small advances have been 
retired. 

La Caja de Conversion was created by national law in the year 
1896 for the purpose of controlling the emergency of the country, its 
duties being the exchange of used notes for new ; the receiving of gold 
and issuing paper money for its legal value, which is 44 cents (gold) 
per dollar ; to receive back the paper, giving gold at the same rate ; and 
having the exclusive control of the printing and issuing of the cur- 
rency of the country. When the Caja de Conversion was created the 
circulation of currency in this country was about 300 millions, but 
to-day we have about 600 millions ; the gold value is about 425 mil- 
lions, and against this there is in the vault nearly 300 millions, about 
70 per cent of the notes issued. 

BANKS. 

Having explained how our country has negotiated its external 
loans, it may be interesting for you to know a little of our banking 
system. 

In the early years of our independence a number of banks were 
established, but the principal one was the old Bank of the Province 
of Buenos Aires, founded in the year 1802. This bank was a bank 
of issue, having fiscal privileges, and became a very powerful in- 
stitution, being the pioneer and founder of the wealth of our coun- 
try; it used to loan its money at low interest, with a 5 per cent 
amortization each three months to the farmers and owners of land, 
enabling them to convert their lands into our fine ranches of to-day. 
This is how the principal landowners of our country have made 
their fortunes. This bank had close relations with Messrs. Baring 
Bros. & Co., and became very powerful, having large credits in 
London and controlling the exchange market for many years. The 
financial and political crisis of 1890 caused a suspension of this 
powerful institution, and it was some years before it was reorgan- 
ized with a capital of $30,000,000, being to-day half owned by the 
Province of Buenos Aires and half by private shareholders. 

In the year 1873 a group of wealthy citizens organized a national 
bank, the Government contributing half of the capital, and for many 
years this was a powerful institution, helping the development of 
all our industries in the Republic, such as the sugar in Tucuman, the 
wine industry in the Provinces of Mendoza and San Juan, and 
agriculture in the Province of Santa Fe. This institution also ex- 
perienced the same financial difficulties as the Provincial Bank of 
Buenos Aires, owing to our crisis in the year 1890, and it was under 



556 PAN AMERICAN FINANCIAL CONFERENCE. 

Dr. Pellegrini's administration in the year 1891 that the Banco de la 
Nacion Argentina was created, with a capital of 50 million dollars 
currency (this bank taking over the liquidation of the Banco Na- 
cional). It is an entirely official bank, and has in one of the arti- 
cles of its law of creation a clause that all the net profits are to be 
applied to the increase of its capital. To-day it has reached the 
sum of 128 millions of dollars, equivalent to over 60 millions United 
States gold, and has besides a reserve fund of 14J millions in gold. 
It is managed entirely independent of the Government. The direc- 
tors are named by the President of the Eepublic, requiring con- 
firmation by the National Senate. It has over 150 branches in the 
Eepublic, and is constantly increasing them, following the growth of 
the nation. It has no agencies abroad, although its financial rela- 
tions with the principal banks and bankers of the world are being 
increased every year, now having very friendly relations with some 
of the principal banks of the United States. Its deposits have 
reached over 300 millions gold, and during the universal financial 
difficulties of last year it helped commerce and industry of the 
Eepublic, which would have suffered greatly with the restriction of 
European credits caused by the war. 

Besides the Bank of the Nation and the banks of the Province of 
Buenos Aires, to which I have referred, we have several private 
banks formed solely with Argentine capital, which are very pros- 
perous institutions and have been created as the requirements of 
the country demanded, such as the Banco Espanol and Banco de 
Italia del Eio de Plata, whose combined capital is over $80,000,000 
(gold). Besides we have several foreign banks which have taken 
a very important role in the formation of the trade of our country. 
One of our first foreign banks was the Bank of Maua, established in 
Buenos Aires and Montevideo about 1855, now liquidated. The 
London and Eiver Plate Bank was established in the year 1862 and 
continues being the principal foreign bank. Since that date we 
have the London-Brazilian Bank, the British Bank, Anglo-South 
American Bank, two German banks, and several other banks, in- 
cluding Italian, Spanish, and Dutch, with a total capital of about 
$300,000,000, and the last established being an agency of the National 
City Bank of New York. 

It may also be interesting to make a few remarks with regard to 
the National Mortgage Bank, which is a Government institution 
managed by a board of directors named by the President of the 
Eepublic, with the approval of the Senate. This institution issues 
national cedulas (mortgage bonds), which are guaranteed by real 
estate and can only be granted by giving 50 per cent of the value 
of the lands. Loans are limited to $250,000 to any one person. 



MEMORANDUM BY DE. SAMUEL HALE PEARSON. 557 

These cedulas are valuable bonds and bear interest of 5 and 6 per 
cent. Besides the guaranties above mentioned, the bank being a 
national institution has also the guaranty of the Argentine Eepub- 
lic. Some of the first issues were of 7 per cent, but all have 1 per 
cent amortization. They are principally held in Belgium, having 
been one of the favorite investments of the Belgian public. The 
total amount of cedulas issued is in the neighborhood of 200 millions. 
Several English, French, and Belgian mortgage companies have 
branches. These companies pay cash and issue their own bonds in 
their respective countries. 

The following statistics may be of additional interest to you. In 
1913 the international commerce of the Argentine Eepublic totaled 
$996,216,000. Its population that year was 7,731,257, and its re- 
sources $129 per capita. The imports of Argentine products into 
England amounted to $173,892,580 (gold) against exports of that 
country into the Argentine Eepublic of $117,151,230 (gold). During 
the same year the United States imported $26,863,732 (gold) against 
exports of $52,894,834 (gold), leaving a trade balance in favor of the 
United States of $26,031,102. The principal imports of the Argentine 
Eepublic from the United States consisted of iron, wood, oils, and 
implements. There are 163 banks, with a total capitalization of 
300 millions of dollars, of which one-third is the capital of the 
Banco de la Nacion. Of these 163 banks, 25 are foreign. In 1857 
the railroad mileage was 6 miles, costing $285,108; in 1913 it was 
20,100 miles, costing $1,210,000,000. The number of passengers 
carried was 80,000,000, and the amount of freight 43,000,000 tons. 
Eefrigerating concerns in 1885 had a capital of $6,684,000, while in 
1913 this was increased to $54,000,000, Argentina produced 280,000 
tons of sugar in 1913, of which 105,000 tons was exported. The area 
of land under cultivation is 93,015 square miles, and its products are 
as follows: Flour, 1J million bushels; wheat, 104 million bushels; 
oats, 61 million bushels; maize, 190 million bushels; linseed, 40 
million bushels. 



MEMORANDUM SUBMITTED BY THE CHILEAN DELE- 
GATION ON QUESTIONS SUGGESTED BY THE 
SECRETARY OF THE TREASURY FOR 
THE CONSIDERATION OF THE 
GROUP COMMITTEES 



559 



MEMORANDUM SUBMITTED BY THE CHILEAN DELEGATION ON 
QUESTIONS SUGGESTED BY THE SECRETARY OF THE TREAS- 
URY FOR THE CONSIDERATION OF THE GROUP COMMITTEES. 



I. PUBLIC FINANCE. 

In addition to provision for the ordinary requirements of ad- 
ministration and defense, 12 per cent of the entire budget is as- 
signed to public instruction and considerable sums are annually 
provided for the development of a water and drainage system in 
the principal cities of the Republic and for the construction of port 
works, which, when completed, will represent an outlay of over 
$70,000,000 Chilean gold, equivalent approximately to $26,000,000 
United States gold. 

The revenue and expenses of the country have increased in propor- 
tion to the general development of commerce, agriculture, and other 
industries, as can be seen by the following figures : 



Income and expenses in 1894. 


Pesos of 18d. 


United States 
currency.* 




71,180,200 
56,898,000 


$25,945,000 
20,739,000 







^Approximately. 

Twenty years later, in 1913, the last normal year before the war, 
the fiscal revenue of Chile amounted to $262,270,446.65 paper money, 
and $67,806,984.71 gold of 18d. Reducing at the rate of lOd. the 
paper money, that amount would mean $77,575,000 American gold. 

The budget for 1914 amounted to $252,626,967 paper money, and 
$121,768,583 gold of 18d., equivalent in total to $95,542,000 American 
gold. 

As a consequence of the war in Europe, the fiscal budget for 1915 
has been reduced to the following figures : $184,091,845.32 paper cur- 
rency, and $81,127,639.33 gold of 18d., or a total of approximately 
$63,362,000 American gold. 

98257°— 15 36 561 



562 



PAN AMERICAN FINANCIAL CONFERENCE. 



The following tables show a classification of revenue and outlay in 
1913 and 1914: 

REVENUE IN 1913. 



Source. 


Paper money. 


Gold 18d. 


Custom receipts: 


§56,440,899.49 




Exports — 


$90,128,620.73 

554, 953. 50 

195. 00 








4,829,087.90 






Total 


61,269,987.39 


90,683,769.23 






6, 646, 414. 37 

392, 512. 93 

69, 424, 874. 43 

27,217,036.27 




Mint 


.19 






Other ordinary receipts 


6, 068, 958. 47 






Extraordinary receipts: 

Overcharge in import duties 


164,950,825.39 
42,957,995.49 


96,752,727.89 




412,724.12 






Total 


207,908,820.88 


97,165,452.01 





BUDGET FOR 1914. 



Expenditure. 



Interior department (police, post and telegraph services, steamship 
services, hygiene, hospitals, and benevolent institutions) 

Foreign affairs department (diplomatic and consular services, coloniza- 
tion offices, subsidy to the church) 

Justice 

Public instruction 

Treasury department (account departments, treasuries, customhouses, 
internal-revenue department, and foreign debt) , 

War department 

Navy department 

Industry and public works department (technical schools, agricultural 
and industrial promoting offices, public works) 

Railways department 

Total 



Paper currency. 



853,635,441.00 

4,722,708.00 
10,651,649.00 
38, 993, 906. 00 

18,040,995.00 
39, 612, 402. 00 
18,828,026.00 

25,367,552.00 
42,774,288.00 



252,626,967.00 



Gold 18d. 



$549,399.00 
1,510,146.00 



344, 118. 00 

60,401,310.00 

451, 172. 00 

35,736,518.00 

221,256.00 
22, 554, 664. 00 



121,768,583.00 



The European war has had a serious but temporary effect upon 
Chilean revenues. The chief article of export — nitrate of soda, vir- 
tually a Chilean monopoly — is employed chiefly as a fertilizer, but 
also used largely in the manufacture of acids and explosives. The 
increased demands for the latter purposes do not offset the curtailed 
demand for agricultural purposes, and exports have accordingly 
fallen off considerably. In normal times the production exceeds 
5,000,000 Spanish quintals per month, which is more or less the 
quantity exported, the exports in 1913 having totaled 2,700,000 tons, 
about 60,000,000 Spanish quintals, and were on an ascending scale. 
An export duty of 2s. 4d. per quintal is levied on this commodity, 
which in 1913 yielded more than £7,000,000 revenue to the Govern- 
ment. As an immediate effect of the war, the production and export 
fell off to about 2,000,000 quintals per month, but the conditions, how- 
ever, of production and export are gradually improving. 



MEMORANDUM BY CHILE. 563 

Customs duties are the second largest source of revenue, and they 
have also been diminished by a curtailment of imports as a result 
of the war. 

With the utmost economy in public expenditure it is evident that 
it can not be brought promptly within the revenue while this is so 
largely (although temporarily) reduced, and that facilities will be 
required to meet the deficiencies. The credit and borrowing ca- 
pacity of Chile, however, are not affected by prevailing conditions, 
since the nitrate deposits constitute, as has been previously stated, a 
monopoly of that necessary commodity, and the Government ni- 
trate fields, held in reserve, represent a practically inexhaustible 
supply. 

Apart from its resources in nitrate deposits, the Government owns 
vast} lands in Patagonia and Tierra del Fuego, which are rented 
for sheep farming on an extensive scale. These lands, together with 
the trunk system of railroads owned by the Government, represent 
in value much more than the foreign debt. 

As shown by the budget for 1915, the principal measure adopted 
to meet the disturbances caused by the war on the public revenue is 
economy in public expenditures. 

The Government has also appointed a special commission to study, 
in connection with the interests represented by the London nitrate 
committee and with the nitrate dealers, a plan of centralization of 
sales to encourage the increase of nitrate consumption by keeping 
permanent stocks in the principal markets and assuring, as far as 
possible, the stability of prices. 

From' July, 1914, to February 28, 1915, 18,405,419 Spanish quintals 
were exported, as compared with 42,027,526 from July, 1913, to Feb- 
ruary, 1914, and 42,263,589 from July, 1912, to February, 1913. 

MINERAL RESOURCES. 

The copper output of Chile is increasing, owing to the development 
of large copper properties, notably the Braden copper mines and the 
prospective output of the Chuquicamata mines, in both of which 
properties North American capital to the extent of some $39,000,000 
is invested. The Bethlehem Steel Co. is developing iron mines in the 
Coquimbo district, at an estimated outlay of $15,000,000 United 
States gold or more. 

Coal is found in various sections of the country, but the principal 
mining center is the coastal region south of the River Bio Bio, as 
far as the port of Lebu. Deposits have been found still farther 
south, and in Punta Arenas a mine is worked for the steamers and 
local consumption. The coal fields of the Province of Araucc cover 



564 



PAN AMERICAN FINANCIAL CONFERENCE. 



618 square miles, and it is estimated that they contain over 1,800,- 
000,000 tons. The coal mining companies have invested in this in- 
dustry over $7,500,000 United States currency and now produce 
over 1,000,000 tons of coal per year. 

Of the coal and other Chilean industries the report of Mr. Otto 
Wilson contains valuable information. 

The consumption of nitrate of soda in the United States is show- 
ing more gratifying progress than in any other country. In 1905 
the United States consumed 272,500 tons of nitrate, at a value of 
$9,306,577 United States gold, increasing as follows : 



Year. 


Tons. 


Value. 


Year. 


Tons. 


Value. 


1906 


373,942 
332,679 
323,543 
329,124 
538,119 


$13,115,725 
13,595,458 
12,277,964 
11,296,083 
16,225,296 


1911 


528,435 
475,560 
573,773 
561,209 


$16,244,812 
15,123,210 
19,942,419 
17,808,763 


1907 


1912 


1908 


1913 


1909 


1914 


1910 









The immediate effect at the outbreak of the European war was to 
curtail the export not only of nitrate of soda but of copper and other 
products of Chile. It also resulted for a time in the refusal to accept 
and pay bills of exchange in London drawn against shipments of 
nitrate of soda, and the reflex effect of this situation, leading to a 
moratorium in London, upon financial conditions in Chile, prompted 
the Government to declare a 60-day moratorium there. 



II. MONETARY SITUATION. 

The monetary system of Chile is founded upon a law of 1895 
fixing the basis of the peso as 18d. sterling. In 1898 the issue of 
paper money was authorized, the amount in circulation at present 
being $150,000,000, for the redemption of which the Government has 
a deposit at its credit in European banks which amounted on Decem- 
ber 31, 1913, to 105,949,222.83 Chilean gold pesos of 18d., or ap- 
proximately £7,950,000, and which has since been increased by the 
accrued interest. In obedience to a demand for elasticity in the cir- 
culating medium, a law of May, 1912, created the Caja de Emision, a 
special organization for the issue of paper currency to be delivered 
to the banks against a deposit in cash of 12d. sterling per peso. By 
this means the banks are able to obtain currency to meet the require- 
ments of commerce, and many difficulties have been overcome, includ- 
ing those incident to the outbreak of the war, which caused at first a 
heavy claim upon this facility. Now things have been brought back 
to normal conditions. 

Prior to the war both branches of congress had agreed upon a 
project to give stability to the value of the paper currency, adapting 



MEMORANDUM BY CHILE. 



565 



to the conditions of Chile the system known by the name of gold- 
exchange standard, and taking as a basis the average value of the 
peso over a series of preceding years, viz, lOd. per peso. To provide 
for emergency necessities, a central financial institution was de- 
signed, which would also regulate relations between the Government 
and the banks, as well as between the banks themselves. The dic- 
tates of prudence, under the conditions brought about by the war, 
forbade the adoption of this new system at that time. Had it been 
adopted, however, it is evident that, after providing for the redemp- 
tion of the entire circulation of paper, it would have left a consider- 
able surplus to the Government. 

Notwithstanding the recommendation of the first Pan American 
Congress in favor of a uniform international monetary system, the 
Chilean delegation regards it as extremely difficult to adopt a uni- 
form basis of value in view of existing conditions and of the diverse 
basis already adopted by many of the South American countries, for 
the most part with relation to the pound sterling. It would be neces- 
sary to readjust the entire system of finance, both internal and 
external. 

HI. THE PRESENT BANKING SITUATION. 

The war in Europe has had no effect upon the stability of the 
banking system in Chile. The banking law of 1860 remains in effect, 
except as to the power it gave banks to issue notes, and which was 
canceled many years ago. Foreign banks duly incorporated may 
open branches in Chile. There is, however, at present a project 
of law requiring them to invest or maintain in Chile the capital 
they declare for use in the country, and limiting the deposits they 
may receive in proportion to such capital. At present there are 
22 Chilean deposit and discount banks, with about 200 branches 
distributed through the country. There are also 6 foreign banks 
doing business in Chile, each having many branches. 

The following table shows the financial movement for the year 
ending December 31, 1913 : 

CHILEAN BANKS. 



Statement. 



Paper money. 



Gold, 18d. 



Deposits 

Capital 

Profit and loss 

Cash 

Discounts, loans, and advances 



$316,055,823.55 

142,271,047.00 

10, 587, 134. 61 

51,595,617.35 

453,318,217.84 



$33,041,352.93 

502,000.00 

50,063.57 

6,759,589.59 

25,494,440.42 



566 PAN AMERICAN FINANCIAL CONFERENCE. 

FOREIGN BANKS. 



Statement. 



Paper money. 



Gold, 18d. 



Deposits 

Capital , 

Profit and loss. 



$94,604,919.33 
16,639,207.92 



Discounts, loans, and advances. 



14,853,229.42 
137,797,622.09 



$28,060,408.87 
8,267,973.85 



2,004,020.93 
31,220,208.17 



For the year ending December 31, 1914: 

CHILEAN BANKS. 



Statement. 



Paper money. 



Gold, lSd. 



Deposits 

Capital. 

Profit and loss 

Cash 

Discounts, loans, and advances 



$313,138,171.18 

188,477,340.33 

9,337,406.61 

76,831,730.05 

418,613,893.94 



$40,341,725.44 

2,121,035.99 

44,992.33 

5,997,985.45 

16,715,243.01 



FOREIGN BANKS. 



Statement. 


Paper currency. 


Gold, 18d. 




$78,415,724.82 
27,632,312.91 


$28,327,621.54 
3,267,973.85 


Capital 


Profit and. loss 


Cash 


30,011,968.89 
93,898,825.28 


2, 222, 068. 00 


Discounts, loans, anr] advances ... 


32,519,997.35 







The foregoing comparison of 1914 with 1913 shows that the 
European war caused no impairment to the integrity of the banking 
situation, notwithstanding the fact that the foreign banks were con- 
strained to remit to their home establishments the greater part of 
the funds that they had in the country. 

The Caja de Credito Hipotecario is an official institution, organized 
under a law of 1857, primarily to assist agriculture by making loans 
on real estate for long terms. The same law authorized the forma- 
tion of private institutions of similar character, fixing regulations 
for their loans. The operations for these institutions up to the end 
of the year 1913 is set forth in the following table : 

Bonds issued. 



Name of institution. 



Chilean 

paper 

currency. 



Francs. 



Pounds 
sterling. 



Caja Hipotecaria 

Banco Hipotecario de Chile 

Banco Garantizador de Valores.. 
Banco Hipotecario de Valparaiso 



253,098,100 

110,076,500 

44,841,500 

11,833,000 



107,033,500 



626,790 



MEMORANDUM BY CHILE. 



567 



Savings banks in Chile are of relatively modern origin, but shows 
substantial development. Twenty years ago the total deposits were 
$4,654,216, while in 1914 they exceed $100,000,000. The statement 
as of December 31, 1913, is as follows : 

Amounts deposited. 



Name of institution. 



Caja de Ahorros de Santiago 

Caja Nacional de Ahorros, which has 115 branches 
throughout the country 

Caja de Ahorros de Empleados Publicos (civil 
service clerks) 

Sociedad Proteccion Mutua de Empleados Pu- 
blicos 

Caja de Ahorros de los Ferrocarriles del Estado 
(State Railways) 



Depositors. 



153,066 

359, 622 

7,650 

3,540 

4,359 



528,237 



Paper 
currency. 



$25,929,814 
57,032,670 
5,331,056 
2,586,058 
2,034,150 



$92,913,748 



Mortgage 
bonds. 



$3,497,577 
3,020,613 



$6,518,190 



Totals. 



$29,427,391 

60,053,283 

5,331,056 

2,586,058 

2,034,150 



$99,413,938 



Should such restrictions upon the operation of foreign banks in 
Chile as are contemplated in the project of law referred to become 
effective, it will not affect the volume of business between Chile and 
the United States, as it is expected that the Chilean financial institu- 
tions will come into closer contact with financial institutions in the 
United States and cooperate to mutual advantage. 



IV. THE FINANCING OF PUBLIC IMPROVEMENTS. 

The national public debt of Chile consists of nine loans of 4J per 
cent interest, originally amounting to £16,395,500 ; of seven loans at 
5 per cent, the primitive value of which was £22,655,000 ; of one loan 
of 5J per cent, originally of £200,000; and of one 6 per cent, orig- 
inally of £149,000. 

Total, 18 loans, the aggregate of which is £39,399,500, reduced now 
through annual sinking funds to a little over £33,000,000. The exact 
figure of December 31, 1913, was £33,912,340. 

Of these loans, two were floated in Germany, one in Paris, one in 
Chile, and the rest in London. The highest price of issue was lOlf 
for the 4r| per cent loan of 1889, and the lowest 89, for the 4J per cent 
loan of 1885. 

Here is a summary of the external debt of Chile, which is repro- 
duced from the South American Hand Book, recently published by 
the National Foreign Trade Council, after correcting small errors 
and omitting the two last items which, although referring to bonds 
issued under guaranties from the Government, do not belong to the 
national debt but to private companies : 



568 



PAN AMERICAN FINANCIAL CONFERENCE. 

Summary of debt of Chile. 
Government debt (external). 



Year. 



Rate of 
interest. 



Sinking 
fund. 



Name of loan. 



Original 
amount. 



Amount out- 
standing. 



Issue 
price. 



1885 



1887 



1892 



1896 
1900 

1905 

1906 

1909 

1910 

1911 

1911 

1911 



Per cent. 

4£ 
5 



Per cent. 
h 

h 

h 

I 



Chilean Government 4£ per cent 

loans of 1885 

Chilean Government 4^ per cent 

loans of 1886 

Chilean Government 4J per cent 

loans of 1887 

Chilean Government 4^ per cent 

gold loan of 1889 

Chilean Government 5 per cent 

loan of 1892 

Chilean Government 6 per cent 

international loan of 1892 

Chilean Government 4 J per cent 

bonds of 1893 

Chilean Government 4J per cent 

loans of 1895 '. 

Chilean Government 4J per cent 

loans of 1896 

Penuelas loan 

Chilean Government 4J per cent 

Coquimbo Railway bonds 

Chilean Government 5 per cent 

loan of 1915 

Chilean Government 4J per cent 

gold loan of 1916 

Chilean Government 5 per cent 

loan of 1909 

Chilean Government 5 per cent 

loan of 1910 

Chilean Government 5 per cent 

loan of 1911, first series 

Chilean Government 5 per cent 

loan of 1911, second series 

Chilean Government 4| per cent 

bonds (Copiapo Railway bonds). . 



£808,900 

6,010,000 

1,160,200 

1,546,400 

1,800,000 

149,000 

630,000 

2,000,000 

4,000,000 
200,000 

265,000 
1,350,000 
3,700,000 
3,000,000 
2,600,000 
4,905,000 
5,000,000 

275,000 



£531,100 
4,206,700 

817,500 

1,223,640 

1,447,300 

90,520 

495,700 

1,661,300 

3,436,700 
74,400 

222,160 
1,256,700 
2,981,220 
2,934,700 
2,517,040 
4,802,180 
4,948,200 

265,280 



97£ 
101f 

95 



93£ 
95§ 



95J 

94£ 

96£ 

99 

98£ 

98J 



Total external debt of Chilean Government. 



£39,399,500 



£33,912,340 



There have also been placed in London £2,000,000 in treasury 
notes. 

Besides, the Government of Chile has guaranteed a private loan 
of the Iron Smelting Co., of Corral, for £525,000 ; the bonds issued by 
the Transandine Railway Co., aggregating a sum of £1,450,000 ; and 
also, the bonds issued by the Longitudinal Railroad contracting com- 
panies, the approximate value of which is £7,000,000. The bonds for 
£2,218,413, which appear in the last two items of the table of the 
National Foreign Trade Council, are part of this last amount. 

In Chile the street tramways and the electric and gas lighting 
systems are private enterprises. The railroad system of the country, 
except the nitrate railways, the Antof agasta Railway, which traverses 
Chile en route to Bolivia, the railway belonging to the Arauco Co., 
and some few small railways serving private interests, is, as already 
stated, Government property. The Chilean Steamship Co., which 
operates a line of Chilean steamers along the Pacific coast up to 
Panama, with little or no aid, at present, from the Government, is 
a private enterprise. 



MEMORANDUM BY CHILE. 



569 



The waterworks at each locality, although often constructed by 
the Government, is the property of the municipality it serves, so 
that the Government has no concern with the financing of public 
utilities except when it guarantees the obligations of a Province or a 
municipality. At the present time the Valparaiso waterworks 
is seeking a loan of £100,000. Three years ago a £250,000 loan was 
issued in London on exceptionally favorable terms. This loan offers 
a special pledge of the water revenues and is guaranteed by the Gov- 
ernment, but so far no interest has been manifested in the United 
States in the business. 

Chile is not a federal country, and consequently there are no 
State or Province debts. Notwithstanding this, from time to time, 
municipal bodies are authorized by law to float loans for the purpose 
of building public works. The amount of the outstanding municipal 
loans is as follows : 

Municipal loans (external). 



Year. 


Rate of 
interest. 


Sinking 
fund. 


Name of loan. 


Original 
amount. 


Amount 
outstand- 
ing. 


Issue 
price. 


1894.... 
1912 


Per cent. 

5 
5| 


Per cent. 
2 


City of Valparaiso 5h per cent loan 

City of Valparaiso 5£ per cent water-board 

loan. 

City of Vina del Mar 5 per cent bonds 

City of Concepcion 5£ per cent sterling 

loan of 1912. 
City of Concepcion 5| per cent sterling 

loan of 1913. 


£200,000 

250,000 
200,000 

100,000 
50,000 


£74,400 

244,200 

198,440 

99,000 
50,000 


94 


1913.... 




99 
95£ 

100 
100 


1912.... 
1913.... 


2 

2 


Tc 








£800,000 


£666,040 










The internal deb 

Treaty of peace with ] 
Paper money issued b; 
Municipal debts taker 
Censos redimidos (pe] 
3 per cent internal lor 


t of Chile is given below : 
Bolivia (of 18 d.)- - ~ - 




$5, 822, 535. 00 
150, 000, 000. 00 


? the Government 




l by the Government 




9, 232. 28 


-manent debt) 




30, 450, 431. 46 


m of 1837 




1, 594, 772. 06 


Outstanding r 
Treasury not 


otes of 
es 


paper money previously issued— 




863, 803. 50 
2, 600. 00 













$188, 743, 374. 30 

The principal item of the internal debt is the paper money issued 
by the Government, which is guaranteed, as already said, by the con- 
version fund accumulated in Europe. 

The funds proceeding from external loans have been principally 
devoted in Chile to railroad construction and public works. The 
railroads in Chile belonging to the State represent 5,207 kilometers. 
They are worth over £30,000,000. 



570 PAN AMERICAN FINANCIAL CONFERENCE. 

The operating of the State railways was a source of losses for the 
Government during some years, but the new organization given to 
them as an industrial enterprise and the revised tariffs, which are 
in force since the middle of last year, have modified very favorably 
the situation, and now the Government not only does not incur a 
deficit, as before, but derives from the railways an income which is 
rapidly increasing. 

At present there are under construction in Chile 21 railroad lines 
or sections thereof, with a total length of 2,301 kilometers. 

In Chile the Government builds also bridges and roads, irrigation 
works, water-supply works, port and fluvial works, drainage and 
harbor works. The works of the port of Valparaiso, undertaken by 
the English firm of Pearson & Sons, represent a total value of 
£2,500,000. 

In the port of San Antonio works are now being completed, the 
value of which is £750,000. 

In Talcahuano there is work done in the military port, worth 
£2,000,000, and a dry dock, large enough for the greatest ships afloat, 
is now being constructed there. 

Besides the value of its railroads, the State owns in Chile the 
extensive land situated around the Straits of Magellan that are 
rented for sheep -breeding purposes. In the north the State owns the 
nitrate fields of indeterminate but very considerable value. In the 
balance sheet of the public treasury the unestimated State properties 
figure for £45,000,000. 

There is no relation between the decline of public revenue and the 
service of its foreign debt by Chile. Default in such service has 
never occurred in time of peace or in time of war or even during 
the civil war of 1891. 

The service of the external public debt of the country originates 
an annual expenditure of £2,218,755. The fiscal revenue in gold in 
1913 — last normal year — amounted to $67,806,984.71, after deducting 
the gold that was sold and converted into currency to defray expendi- 
tures in Chile. This amount is equal to £5,085,523. Consequently, 
with less than half the gold revenues, the service of the public debt 
is attended to, and there remains free, for the ordinary necessities 
of the administration, the remaining portion of the gold receipts and 
all the revenues collected in paper currency, which in 1913 amounted 
to $262,270,446.65. 

There are definite projects for the construction of the ports of 
Arica and Antofagasta, both of great importance, because they are 
auxiliaries of the Bolivian trade, a country to which they are con- 
nected by railroad lines. 



MEMORANDUM BY CHILE. 571 

If American capital should interest itself in those works it would 
be possible to adopt either one of these two systems : 

(a) Payment of the work in Chilean Government bonds; or 

(b) Exploitation by the constructing company of the works 
during a certain number of years. 

V. THE FINANCING OF PRIVATE ENTERPRISES. 

As has already been said, the greater part of the Chilian railroads 
belong to the State. Those belonging to private enterprises are alto- 
gether of 2,872 kilometers in length, not including the electric lines 
between Santiago and San Bernardo and between Conception and 
Talcahuano. It is advisable to mention that the Chilean Govern- 
ment has seriously devoted its attention to the electrification of the 
different sections of the railroads, where the traction used has been 
up to the present that of steam locomotives. To that effect it was 
resolved to invite the American and European capitalists to interest 
themselves in those affairs and to send in their respective tenders, 
but that plan has been temporarily postponed by reason of the war. 

The street cars belong entirely to private enterprises and have cost 
$56,000,000 of 18d. 

The telegraph, with a total length of approximately 25,000 kilo- 
meters, belong almost entirely to the State. 

The telephones, on the contrary, belong to private enterprises and 
have been installed at a cost of about $12,000,000 Chilean currency. 
They have 60,000 kilometers of telephonic lines. 

Also of private individuals or corporations are the gas companies, 
those of electric lighting and the power plants, that by reason of the 
natural conditions of the country are able to produce a practically 
unlimited amount of power. 

The extension of agricultural lands actually in operation in Chile 
is of 280,000 square kilometers, in which there are 1,000,000 hectares, 
flat and irrigated; 4,000,000 hectares are susceptible of irrigation, 
constituting a very propitious ground for productive investment of 
American capital. There are also 16,000,000 hectares, more or less, 
of natural forests, and 5,000,000 of natural prairies in Magellan. 
The forests of Chile are not only valuable on account of the excel- 
lent and various woods available, but also because they can furnish 
very considerable amounts of good pulp used in the paper manu- 
facturing industries. 

The financial help necessary for agricultural exploitation is 
principally obtained from the local credit and discount banks, from 
the mortgage institutions, and from the advancements that the ex- 
porting houses — English and German in the greater part and some- 
times American — make against harvests. 



572 PAN AMERICAN FINANCIAL CONFERENCE. 

The principal agricultural products in Chile are, so far, wheat, 
barley, oats, beans, potatoes, and grapes that give wines of excellent 
quality. The cattle industry furnishes beef sufficient for the 
domestic consumption, and no less than 5,000,000 sheep permit us 
to export wool and refrigerated meats. The industry of preserving 
vegetables and fruits has been very successfully initiated and has 
obtained a very powerful development; and the opening of the 
Panama Canal will doubtlessly allow a considerable increase in 
the trade of fresh vegetables and fruits, if, as we expect, there are 
transportation facilities established between the United States and 
South America, as this trade will be favored by the circumstance 
of winter of the Northern Hemisphere corresponding to the summer 
in the southern and vice versa, thus enabling the American markets 
to be supplied during the season in which they lack of those 
commodities. 

There is in Chile no law of warrants, and it would be convenient 
to recommend it as a means of cooperating to the industrial and 
agricultural development and to furnish convenient collateral as 
security for commodity loans. 

It can not possibly be the object of this brief sketch to indicate 
the reforms that could be introduced in order to assure the greater 
uniformity in laws relating to commerce, or to procure the uni- 
formity of the customhouse classification, or to protect trade-marks ; 
but, as this delegation acknowledges the great importance of any 
measure directed to this object, it wishes to recommend the appoint- 
ment of a permanent international commission to which this complex 
labor could be assigned. # 

VI. THE EXTENSION OF INTERAMERICAN MARKETS. 

Chilean merchants are accustomed to long terms of credit accorded 
by European interests. Six months' credit is freely extended 
by European houses located in Chile. Formerly North American 
houses conducted their business on the basis of 30 days' credit, but 
latterly have extended the term of credit to 90 days, or 3 months. 
It appears that the banking systems of Europe favor the liberal 
terms by facilitating their foreign houses, whereas banking in the 
United States has not taken cognizance of this requirement of for- 
eign trade nor steps to facilitate its export commerce. It is under- 
stood, however, that this subject is now engaging the attention of 
the bankers in the United States. 

Efforts are also being made, and will receive all possible assistance 
from the Chilean authorities and banks, to establish a. market for 
dollar exchange in Chile. To accomplish this purpose, however, a 



MEMORANDUM BY CHILE. 



573 



constant demand for a supply of dollar drafts, just as there is and 
always has been a constant supply and demand for sterling drafts 
at fluctuating rates of exchange, will be necessary. There may be a 
large supply of dollar drafts offering at one time, but if it does not 
coincide with the demand for such drafts their value is a matter of 
computation, taking sterling as a basis. 

The war in Europe necessarily curtails the facilities which Central 
and South American countries are accustomed to seek in European 
financial centers. This affords an unusual opportunity for the United 
States to substitute facilities, and should the trend of finance be 
diverted from London to New York in an appreciable degree dollar 
exchange will measurably replace sterling exchange. 

The following table, reproduced from a handbook just published 
by the Pan American Union, shows the articles which constitute the 
imports of Chile. 

The imports, in Chilean currency, by major groups of articles for 
the years 1909, 1910, 1911, 1912, and 1913 were as follows: 

Principal imports. 



Merchandise. 



1909 



1910 



1911 



1912 



1913 



Textiles 

Mineral products 

Coal and oils 

Machinery, hardware, carriages, etc 

Vegetable products 

Animal products 

Paper, and manufactures thereof 

Wines, liquors, and other beverages 

Chemical and pharmaceutical products, 

and toilet articles 

Arms, ammunition, and explosives 

Miscellaneous 



101,983 
844,208 
570,731 
308, 871 
509, 425 
065, 369 
535, 937 
931,337 



2,020,' 

828,! 
842,! 



329,117,833 
18,825,139 
18,778,313 
9,512,876 
11,854,304 
9,142,415 
3,360,852 
2,583,964 

2,335,554 
1,598,488 
1,472,541 



328,711,215 
25,026,353 
18,994,043 
15,523,277 
13,130,294 
12,540,880 
4,053,092 
2,672,152 

2,735,636 
1,472,222 
2,522,315 



$29,935,942 

21,794,433 

17,998,738 

16,156,432 

13,225,745 

9,056,776 

3,425,025 

3,179,733 

2,942,523 
1,104,557 
3, 256, 090 



$28,047,666 
22,275,078 
19,825,175 
14,961,485 
13,933,916 
7,848,276 
3,581,029 
2,193,936 

2,041,045 
1,410,818 
3,155,576 



Total 95,660,208 108,582,279 127,381,479 122,075,994 



120,274,000 



The Chile gold peso is taken as equal to $0,365 United States gold. The United States gold dollar is 
taken as equal to 2.740 pesos gold. These figures are partly from the President's message, partly from 
advance consular reports. They may be slightly modified later. 

The imports, in United States gold, for the years 1909, 1910, 1911, 
1912, and 1913, by principal countries of origin, were as follows : 



Countries. 


1909 


1910 


1911 


1912 


1913 




$31,879,259 
22,646,662 
9,636,402 
5,661,502 


$34,340,573 

26,296,071 

13,369,774 

7,010,929 


$40,805,052 
32,696,171 
15,775,969 
6,931,714 


$38,616,886 

33,189,070 

16,806,341 

7,261,061 


$36,028,311 
29,579,180 
20,090,266 
6,623,252 




United States 







The Chilean delegation will call attention to the necessity of ex- 
tending and broadening the facilities that banks in the United States 
now afford, for acceptances, discounts, and rediscounts, and will move 
also that bonded warehouse warrants and receipts be adopted as a 



574 PAN AMERICAN FINANCIAL CONFERENCE. 

means of providing collateral securities for the development of in- 
ternational commerce. 

The custom tariff of Chile enforced by law No. 980, of 23d of De- 
cember 1897, is based upon a general ad valorem duty of 25 per cent 
and in two exceptional higher rates of 60 and 35 per cent, and two 
lower rates of 15 and 5 per cent. There are also some goods on which 
a specific duty is levied, and others free of duty. 

The protective duty of 60 per cent applies to some commodities, 
the manufacture of which the law intends to promote in Chile, and 
that of 35 per cent to other similar articles and to luxuries, or mer- 
chandise that can not be considered a necessary of life. 

The lower rates of 15 per cent and 5 per cent are chiefly applied to 
goods required for the industrial development of the country, motor 
cars being included under the 15 per cent tax. 

Such articles as tobacco, wines, sugar, salt, etc., are subject to 
specific tax, and finally a great number of commodities, such as coal, 
agricultural and industrial machinery, printing paper, and others, 
not less than 118 in number, were absolutely free of all duty until 
recently. Law No. 2641, dated February 12, 1912, was passed reduc- 
ing the number of articles exempt from duty for a limited period 
and placed a tax of 5 per cent on them. An additional 5 per cent 
is also imposed on all goods according to previous classification. 

VII. MERCHANT MARINE AND IMPROVED TRANSPORTATION FACILITIES. 

The above subject has been referred to a special committee, and 
we will therefore not go into the matter here. 

(Signed) Luis Izquierdo. 

Augusto Villanueva. 
Gonzalo Vergara Bulnes. 



MEMORANDUM SUBMITTED BY THE DELEGATION 
OF THE REPUBLIC OF ECUADOR 



575 



MEMORANDUM: SUBMITTED BY THE DELEGATION OF ECUADOR 
TO THE HONORABLE SECRETARY OF THE TREASURY OF THE 
UNITED STATES ON THE SUBJECTS WHICH IN THEIR JUDG- 
MENT MIGHT BE DESIRABLE TO DISCUSS AT THE SESSIONS OF 
THE PAN AMERICAN FINANCIAL CONFERENCE. 



I. Banking and Currency. 

(1) Desirability of passing adequate legislation for the establish- 
ment and operation of branches and agencies of American banks in 
Latin America, and of Latin- American banks in the United States. 

(2) Adoption of the gold standard in all the countries of the 
Pan American Union. Convenience of constituting a Pan American 
Monetary Union. 

II. Securities. 

(3) Desirability of passing adequate legislation regarding securi- 
ties issued in other countries of the Pan American Union. Eights 
and obligations of stock and bond holders and of the issuing concerns. 
Deed of trust. Nonreplevin securities. 

(4) To obtain the listing and quotation on the stock exchanges of 
the United States of securities issued in Latin America and on the 
Latin- American stock exchanges of securities issued in the United 
States. 

III. Commercial Entities and Contracts. 

(5) Desirability of passing adequate legislation in regard to 
agencies and branch offices of American entities in Latin America 
and Latin American in the United States. 

(6) Desirability of passing laws in regard to reciprocal rights as 
well as for the execution of contracts for public works or others, and 
other obligations with or of Governments, municipalities, and other 
public powers. 

(7) To legally define the rights and obligations of parties in con- 
tracts celebrated in one country to be executed in the other. 

(8) To legally define the rights and obligations of buyer and 
seller in verbal or written contracts, in one place or by mail, in pur- 
chases and sales, on usual terms of i; f. o. b." (free on board) at ship- 

-37 577 _ 



578 PAN AMERICAN FINANCIAL CONFERENCE. 

ping place or at destination, " f . a. s." (free alongside of ship) at 
port of shipment or at destination, and " c. i. f." (cost, insurance, and 
freight). 

IV. Bills of Exchange, Bills of Lading, and Consular Invoices. 

(9) Desirability of passing adequate legislation in regard to bills 
of exchange. Obligations and rights of drawers, drawees, indorsers, 
and holders. Faculty of using indiscriminatingly Spanish, Portu- 
guese, or English in writing, accepting, indorsing, protesting, and 
canceling bills of exchange. To permit the use of money of the 
country of origin where payable or other. Days of grace. Protest. 
Define the quality of " Executive title." Define the interpretation of 
the words " at sight," " on demand," " days sight," and " days date." 
Inconvertibility. General stamp tax. 

(10) To define legally the rights and obligations of parties (ship- 
per, carrier, consignee, and holder) and of customs of ocean bills of 
lading and of those called "through bills of lading." To establish 
the "order" bill of lading where it does not exist (Colombia, 
Venezuela, Panama, and the Dominican Eepublic). 

(11) To establish uniform consular invoices and define their legal 
character. To permit the use of the words "to whom it may con- 
cern " in " order " shipments. 

V. Customs and Traveling Agents. 

(12) To provide the means of establishing a more uniform classi- 
fication in the import tariffs; to determine a uniform manner of 
classifying goods not enumerated in the tariffs of each country. 

(13) To establish uniform regulations for the importation of 
samples with or without value and advertising material, or for 
propaganda, with or without value, by freight, parcel post, or by 
mail. 

(14) To provide reasonable means for storage of goods left as 
collateral subject to d/p (documents against payment), drafts, and 
abandoned goods. Laws of " warrants." 

(15) To establish uniform regulations for traveling agents and a 
reasonable scale of taxes. 

VI. Postal, Telegraph, and Telephone Service. 

(16) To extend the parcel-post service to all countries where it 
does not exist. To facilitate the reexpedition on one postage. Order 
parcels. C. O. D. and insurance services. To extend the postal 
money order service to all countries where it does not exist. 



MEMORANDUM BY ECUADOR. 579 

(17) To establish the minimum rate between the countries of the 
Pan American Union (domestic rates) and to improve the service. 

(18) To study the convenience of establishing inter- American land 
lines, with uniform rates. 

(19) To study the convenience of developing, on a mutual basis, 
the long-distance telephone service. 

(20) To study the convenience of establishing interlocked radio- 
graphic stations on the entire continent. 

VII. Commercial Facilities. 

(21) To pass adequate legislation in regard to rights and obliga- 
tions of consignors, consignees, and creditors in consigned mer- 
chandise and products. To define the entailment of goods to accept- 
ances or advances against them. 

(22) To simplify legal commercial documents (powers of attor- 
ney, contracts, transfers) to be used in another country. 

(23) To establish uniform laws in regard to commercial hygiene 
and sanitation. 

(24) To' establish the chattel mortgage for agricultural, industrial, 
mining, and manual machinery, as well as for the necessary imple- 
ments for these industries and furniture. 

VIII. Trade-Marks and Patents. 

(25) To reform the laws in regard to trade-marks in order to 
make them as uniform as possible and to impede piracy (Treaty 
1910). 

(26) To modernize and make uniform laws in regard to patents 
and privileges (exclusive rights). 

IX. Immigration and Mines, Acquisition of Land. 

(27) To revise and modernize immigration and mining laws. 

(28) To revise and modernize laws for the acquisition of public 
lands. 

X. Navigation. 

(29) To facilitate inter- American maritime communication, grant- 
ing franchises to ships of one country in the other. Establishment 
of free zones for the manufacture, transshipment, and distribution 
of products and merchandise. 

(30) Unification as much as possible of the service of the different 
transportation companies of the Pan American countries for cargo, 
mails, and passengers. 



580 PAN AMERICAN FINANCIAL CONFERENCE. 

XI. Pan American Union. 

(31) That the office of the union compile and publish in English, 
Spanish, and Portuguese the laws of commercial interest of the 20 
Latin- American countries. 

(32) To appoint a permanent committee to secure the adoption of 
the resolutions of the conference and to prepare in accord with the 
governing board of the union the material and formulate the pro- 
gram of future commercial and financial conferences. 

(Signed) Juan Cueva Garcia. 

Vicente Gonzales B. 
Enrique Gallardo. 



MEMORANDUM SUBMITTED BY DR. PEDRO 

RAFAEL CUADRA, DELEGATE OF THE 

REPUBLIC OF NICARAGUA 



581 



MEMORANDUM SUBMITTED BY DR. PEDRO RAFAEL CUADRA, 
DELEGATE OF THE REPUBLIC OF NICARAGUA TO THE PAN 
AMERICAN FINANCIAL CONFERENCE. 



I. Economic Situation of Nicaragua. 

The economic situation of Nicaragua is not quite satisfactory. 
For more than fifteen years the country had an inflated currency. 
Under such conditions there can be nothing but general poverty, and 
in consequence commerce fails. It is no wonder, therefore, that con- 
ditions in Nicaragua are bad. Apart from political causes, it seems 
to me that the long existence of a system of paper currency accounts 
for the country's present economic disturbance. 

To remedy this bad situation the present Government of Nica- 
ragua started a series of economic reforms, which are being carried 
out with firmness. The first and principal aim sought was to put 
an end to the inflation. This we realized by enacting a monetary 
law, which has been in operation for the last two years. Our mone- 
tary system is now based on a gold standard. The monetary unit, 
the " cordoba," is worth a dollar. We have no gold coin, only silver 
and bank notes. To maintain the cordoba at par with the American 
dollar there is a " conversion fund " in the United States and Europe, 
against which drafts are drawn periodically after natural demands. 

When the European war broke out it was thought wise to sus- 
pend the selling of drafts to prevent the exhaustion of the fund 
because of the panic. Then exchange went up. As our trade bal- 
ance is not favorable, the rate of exchange reached the maximum of 
25 per cent premium, i. e., $100 American gold was worth $125 
cordobas. At present conditions are improving and the rate of ex- 
change is only 108 per cent. 

II. Banks. 

Next to the monetary reform comes the establishment of the 
National Bank of Nicaragua. This bank has the exclusive privi- 
lege of issuing legal-tender notes, strictly subject to the provisions 
of the monetary law, and for the account of the Republic only. 
Forty-nine per cent of the stock of the national bank is owned 
by the National Government, 51 per cent being the property of 
American bankers. The bank does ail sorts of banking business. It 
has a special issue department for the maintenance of the national 

583 



584 PAN AMERICAN FINANCIAL CONFERENCE. 

currency. Its capital is $300,000, which may be increased if necessary 
to meet the country's needs. 

There are two more banks in the country. These are private 
credit institutions, whose charters were granted by the Government. 
They do every sort of banking business except the issuing of notes. 
Their capital is small, but they are doing as good business as their 
limited resources permit. We expect the country to prosper when 
the evils of the past inflation are entirely gone. Then conditions will 
be better. We will, furthermore, encourage the establishment of 
other banking institutions to contribute to our financial develop- 
ment. 

III. Business Conditions. 

Business conditions have not been good. Owing to an overissue 
of paper money the merchants overstocked their stores to satisfy 
the general demands. This commerce was unsound, and the conse- 
quence was that when the Government started the monetary reform 
and things became normal it began to decrease, or, better to say, to 
reduce itself to normal conditions. This was the state of affairs 
when the European war broke out. Then foreign credit was stopped, 
and to prevent the failure of the principal firms the Government 
was forced by public demand to declare a moratorium. Notwith- 
standing this prices have continued normal, as the stoppage of big 
importations has caused the selling out of much surplus stock. If 
the war comes to an end soon, our commerce will be able to start 
business again under better conditions with the European markets. 
If not, then trade with the United States will spring up vigorously. 
At present a third of our trade is with the United States. If the 
manufacturers of the United States desire to increase their trade, 
they should grant the merchants the same terms of credit as Europe 
allowed them before the war. 

IV. Articles of Exports. 

Our principal articles of exports are coffee, gold, and bananas. 
We also export hides, rubber, and cattle. The last mentioned, though 
very extensive as a part of the country's wealth, has not formed as 
yet an important item of our export statistics owing to the scarcity 
of good roads to facilitate their exportation. It is to be desired that 
the fresh-meat trade with foreign countries be started, but nothing 
as yet has been done in this line. 

V. Agricultural Resources. 

Nicaragua is an agricultural country; but, unfortunately, the 
methods of farming employed are very primitive. There is scarcely 
a notion of scientific agriculture. The yield is, therefore, very poor. 



MEMORANDUM BY NICARAGUA. 585 

We expect that when we improve our methods of farming and start 
scientific processes general conditions will be better. The present 
administration of Nicaragua has had as one of the planks of its 
platform the fostering of this branch of national prosperity, through 
agricultural schools, experimental stations, agricultural banks, etc., 
but it has not been able as yet to do anything in this line because 
of lack of money, and also because its time has been occupied in 
other reforms, if not^more vital, at least more urgent. 

TRANSPORTATION. 

The transportation question is very serious for Nicaragua. This 
item is one of our great problems. The Government is aware of its 
seriousness. It is not a question here of a general system of good 
roads crossing all over the Republic. Of course, that is a general de- 
sire ; but Nicaragua's problem as a country is more concrete ; it is a 
problem whose solution is clear to us, and the Government is well 
acquainted with all its data. We will not cease to hammer at it till 
it is solved ; not only because its solution will open a channel of good 
commerce and trade, but also because it is a vital issue of political 
welfare and unity. 

We lack easy communication with the Atlantic coast, and in this 
region are the richest settlements of the Eepublic. A long time ago 
we had a good river route to the Atlantic. The River San Juan 
was then navigable, and San Juan del Norte was a good seaport. 
Now all this is lost. To restore it to its old conditions would im- 
prove our domestic and foreign trade. It is to be noted that when 
the San Juan River was open to commerce the Republic was pros- 
perous. When it was closed conditions became bad, and the old 
prosperity was lost. This fact is more than a mere coincidence. 
It is the sequel of natural processes. With the San Juan River 
in good condition prosperity will come back to the country, because 
it will restore vast areas of rich lands to production, and cattle will 
find a proper outlet to foreign markets. If the river can not be 
made navigable, the Government has thought of the possibility of 
building a railroad from one of the ports on the Lake of Nicaragua 
to the Atlantic coast. The Panama Canal has bettered conditions 
in this particular, but it can not cure the evil radically. Needless 
to say, the Government has not been able to do anything in this 
affair, because it has had neither the resources nor the opportunity 
necessary for the railroad construction or for the improvement of 
the River San Juan, though twice it has intended to do so, having 
entered into contracts to that effect. 

On the Pacific side conditions are better. We have a good rail- 
road from Corinto, a Pacific port, to Granada, a port on the Lake 
of Nicaragua, passing through Chinandega and Leon, important 



586 PAN AMERICAN FINANCIAL CONFERENCE. 

cities with prosperous commerce, and Managua, the Bepublic's capi- 
tal. To run this railroad a company was formed, incorporated in a 
State of the United States ; 49 per cent of the stock is owned by the 
Government and 51 per cent by American capitalists. The railroad 
is in good condition and every day is improving. 

VI. Public Finances. 

The situation of our public finances can be stated in a few words. 
The treasury has been and still is in difficulties. It could not be 
otherwise. The long period of inflation, the frequent recurrence of 
revolutions, former bad governments, etc., account for these bad 
conditions. To remedy this evil the present Government of Nic- 
aragua asked a helping hand from the United States. Through 
the good offices of the State Department we were able to enter into 
relations with two important American firms, Brown Bros, and 
J. & W. Seligman & Co., of New York. With their aid we have, 
despite the bad conditions referred to above, started and carried 
out the monetary reform, the establishment of the national bank 
and the reorganization of the national railroad. Other minor eco- 
nomic reforms have also been carried out. Nicaragua is quite satisfied 
with its business relations with the above-named firms, and see in 
the benefits so far obtained but the proof that for a country to 
prosper it is necessary to have a good understanding between the 
government and capital on a basis of confidence and good will. 

The Government's income is small. It decreased notably when the 
European war broke out. With so small an income, the Government 
could not continue to pay its way. This circumstance forced it to ask 
Congress to enact a proprietary tax law. The law was enacted only 
for two years. As the Government revenues are not enough to meet 
the general needs of the administration, the Government intends to 
ask Congress to establish this tax law permanently. But this was 
not enough to meet the entire situation. The reducing of the national 
budget became also indispensable. We reduced it to half its former 
amount. In this way, the Government weathered the storm pro- 
duced by the European war, in the part affecting its own sphere. 

To meet the country's needs, as occasioned by the stoppage of the 
European credit, the Congress authorized the National Bank of 
Nicaragua to issue 1,000,000 cordobas of legal tender, backed by 
commercial paper, to provide for gathering the crops, especially that 
of coffee. This provision worked satisfactorily ; but the demand for 
the million cordobas authorized by the law never reached that sum. 

I neglected to state that the Government, in order to run the public 
administration with so decreased a revenue, entered into contracts 
with its foreign creditors suspending the paying of the principal 
and interest of its foreign normal debts. As our creditors were will- 



MEMORANDUM BY NICARAGUA. 587 

ing to comply with the Eepublic's wishes, there was no difficulty in 
reaching an agreement between them and the Government. 

VII. Our True Financial Problem. 

The Mcaraguan Government has been facing a peculiar situation 
entirely independent of the effects of the war. Almost all of its 
debts are due and the Government has had no time nor has it been 
in a favorable situation to pay them off or to refund them. Several 
times it has tried to have recourse to a foreign loan, but it has always 
failed to accomplish it. Now it expects to apply the $3,000,000 to 
be paid under the canal treaty with the United States, now pending 
in the Senate, to the payment of those debts which are more pressing, 
paying off the rest with bonds. 

The similarity between our present conditions and problems and 
those of the United States after the Civil War has always attracted 
my attention. To make this comparison clearer I think it relevant to 
copy the following statement of Prof. Bastable about conditions in 
the United States after the Civil War : 

The first results of the contest, he says, were a serious disturbance of in- 
dustry and commerce and a great increase of expenditure. No adequate tax 
system was in existence and accordingly the extraordinary expenditure was at 
first almost entirely met by the use of credit. Treasury notes, culminating in 
unconvertible paper issues, and funded debts were both employed. * * * 
The great financial problems for the Secretary to the Treasury were therefore 
(1) to pay off, or fund, the floating debt, and (2) to provide a permanent 
scheme for the future extinction of the immense liabilities created by the war. 
(Public Finance, 653-654.) 

I can not find better words to convey to your attention a clear idea 
of. our true problems than those used by Prof. Bastable to state that 
grave situation of the United States. The origin of our pressing 
debts is nearly the same. The Secretary of the Treasury of the 
United States spent over two years in improving financial conditions. 
This was possible especially because of the great resources the na- 
tional credit put at his command. Needless to say that we have not 
been so well situated. Our nation's credit is almost nil. We have 
been trying to build it up to the best of our ability, but the results 
as yet are not very satisfactory, though we can not be disappointed 
with those already obtained. 

For this reason it would only accomplish the best of our wishes 
to secure the cooperation of the Treasury Department of the United 
States for us to manage successfully these vital problems. We expect 
something of this kind of cooperation to be the outcome of the Pan 
American Financial Conference, confident that once having solved 
our financial problems our international trade with the United States 
will increase and prosper to our mutual advantage. 



MEMORANDUM SUBMITTED BY THE DELEGATION 
OF THE REPUBLIC OF PANAMA 



589 



MEMORANDUM SUBMITTED BY THE DELEGATION OF THE 
REPUBLIC OF PANAMA. 



The delegation of Panama to the Pan American Financial Con- 
ference has the honor to submit for the consideration of the Secre- 
tary of the Treasury of the United States the following matters, 
which are of special interest to the Republic of Panama : 

I. The revenues of the Republic of Panama have decreased 30 per 
cent since July, 1914, and this decline is due to the following causes : 

(a) The diminution of imports due to the European war. 

(h) The decline of local commerce due to the establishment of 
commissaries by the government of the Canal Zone. The commis- 
saries import merchandise without paying duties, and is thus able 
to eliminate competition of the merchants of Panama. 

II. In order to meet the decline in revenues, Panama has passed 
laws imposing certain temporary taxes and increasing by 20 per cent 
the ad valorem customs dues on imported merchandise. This in- 
crease, however, can not become effective without the consent of the 
Government of the United States, as provided for in what is known 
as the Taft agreement. 

The delegation of Panama deems it a matter of urgent necessity 
that the Government of the United States should give its approval 
to this increase in taxes in order to meet the situation created by the 
decline of national revenues. 

The delegation of Panama further deems it advisable that the two 
Governments concerned — the United States Government and the Gov- 
ernment of Panama — undertake a general revision of all matters re- 
lating to the commissaries in order to establish such limitations as 
will be equitable for both countries concerned. 

III. The commerce of Panama suffers by reason of the differential 
rules established by the Panama Railroad Co., a company which 
to-day belongs to the Government of the United States. The delega- 
tion of Panama sincerely hopes that this matter will be considered 
by the conference, in order to arrive at some conclusion with reference 
to just rules which will at the same time serve to develop commerce 
rather than to destroy it. 

591 



592 PAN AMERICAN FINANCIAL CONFERENCE. 

IV. With reference to all other matters enumerated in the pro- 
gram of the conference, the Republic of Panama has the same inter- 
ests as the other countries of Central and South America, and there- 
fore the delegation of Panama will participate in the discussion of 
these questions in the hope that they will be satisfactorily solved for 
the mutual benefit of the United States and the countries of Latin 
America. 

(Signed) Aristides Arjona. 

Ramon F. Acevedo. 

Ramon Arias, Jr. 



MEMORANDUM SUBMITTED BY THE 
DELEGATION OF PARAGUAY 



98257°— 15 38 593 



MEMORANDUM SUBMITTED BY THE DELEGATION OF PARAGUAY 
TO THE PAN AMERICAN FINANCIAL CONFERENCE. 



ECONOMIC AND FINANCIAL CONDITION OF PARAGUAY. 

The economic and financial depression produced in the civilized 
world by the gigantic war that at present disturbs Europe has made 
itself felt with especial violence in the Latin- American countries — 
which for the greater part are in the beginning of an ever-progressive 
development — and which have seen, unexpectedly, a great part of 
their markets closed, the receipts of their customhouses diminished, 
their budgets impaired to a marked degree, and all this without the 
time requisite to adapt themselves to the conditions or at least lessen 
their disastrous effects. 

It was imperative, therefore, that the reaction should manifest 
itself simultaneously with the disturbance felt, and that each one 
should endeavor to find the corrective of this situation that, par- 
alyzing or devitalizing its economic forces, constituted a barrier to 
its progress. 

Countries manufacturing nothing, or almost nothing, with raw 
materials in abundance produced by their soil, lacking in opportune 
capital to facilitate their development and strength sufficient to 
promote their indispensable activities, it was to be expected that the 
attention of their leading men would be directed toward the great 
Eepublic of the North, which in the course of extended years of 
assiduous and intelligent labor had come to attain, through its mate- 
rial and moral progress, the eminence of the older nations of Europe. 

The Latin- American countries required precisely a broad and cul- 
tivated field of production and consumption, such as the United 
States affords, which will absorb the raw materials that its industries 
require, and, in its turn, furnish the manufactured wares that are not 
found in their own territories. 

The occasion and the circumstances, although unlooked for and 
compelling — at the same time acceptable — adapted themselves ad- 
mirably, moreover, to this new and fraternal reunion, which, without 
the least doubt, will succeed in removing the traditional existing 
conditions that, until the present, have offered vigorous resistance 
to a closer commercial contact. 

595 



596 PAN AMERICAN FINANCIAL CONFERENCE. 

The surprise and fhe consequent confusion of the first moment 
produced, of necessity, as might easily be supposed, a certain per- 
plexity of mind and an absence of definite and safe means for the at- 
tainment of the ends in view. 

The call that we have obeyed could not be better nor more oppor- 
tunely inspired, giving us the occasion, if not to expound ample 
and erudite concepts over the economic and financial relations of our 
continent — which, for my part, I leave to those more experienced in 
these matters — to define, by presenting them with clearness and frank- 
ness, the present conditions and difficulties of our respective coun- 
tries, and which may serve as a basis for an advantageous common 
and simultaneous action. 

The interchange of products and its necessary means of attain- 
ment — which we call " commerce " — prevail through necessity and in- 
terest, guided in their turn by the perfect and minute understanding 
of the fields wherein this mutual activity shall be manifested. If the 
course established and assured since the remote ages which we have 
just indicated offers of its own accord an obstacle difficult to over- 
come in the sense of the increase of commerce, which we desire, the 
insufficiency of appreciation of our own economic resources and 
forces constitutes a no less effective and powerful impediment. 

The circumstances impel us, therefore, to an intelligent, energetic, 
and persevering effort, of whose felicitous outcome there can be no 
doubt, when a Congress such as the present, made up of eminent 
experts — in very truth Americans — has taken under consideration 
the simplification of the problems that we propose to resolve. 

With this conviction, strengthened by fervent hopes, I shall take 
occasion to delineate the most salient features that my country pre- 
sents as a field of activity, hardly touched, for agriculture, stock 
raising, industry, and commerce. 

Situated in the center of South America, with a superficial area of 
approximately 445,000 square kilometers, traversed from north to 
south by a noble river, and bounded in part by another of no less im- 
portance, which bring it in contact with the ocean, its immense nat- 
ural riches have scarcely been disturbed by a population that hardly 
approximates 1,000,000. 

With a mild and healthy climate, its soil, of exceptional fertility, 
is adapted for the cultivation of almost all tropical and subtropical 
fruits, many of them suitable for exportation on a large scale, such 
as : Yerba mate, whose use is becoming more extensive from day to 
day, and which, in the shape of native groves, occupies in Paraguay 
an approximate area of 25,000 square kilometers. The artificial cul- 
tivation of this curious plant, tried until recently without result, has 
finally been successful, and to-day prosperous and extended planta- 



MEMORANDUM BY PARAGUAY. 597 

tions of it may be seen ; tobacco, which constitutes one of the princi- 
pal sources of riches of the country, although its quantity is as yet 
at a minimum of the producing capacity of the soil. Its cultivation 
is being perfected every day, thanks to the efforts of the Banco 
Agricola, which uninterruptedly combats the routine practices of 
former times; oranges and mandarins, unsurpassed for their excel- 
lent quality, and although their exportation has passed 160,000,000 
annually, there yet remains incalculable quantities that it is impos- 
sible to utilize, due to the impracticability of bringing them to 
points of transportation ; essence of petit-grain, appreciated in the 
United States as well as in Europe and conspicuous among the 
special products of the country ; cotton, renowned for its fine quality, 
of long, silky, and strong fiber, is a plant for whose cultiva- 
tion the soil of Paraguay is adapted in an exceptionally favorable 
manner. Its yield is proportionally superior to that of any other 
cotton-raising country — more than 1,000 kilograms per hectar ; sugar 
cane, of easy and profitable cultivation, which yields more than 
48,000 kilograms per hectar; rice, whose quality places it on a par 
with the best of the Carolinas and of Piedmont ; Indian corn, with 
a production of 1,600 kilograms per hectar, and as much as two 
crops per year; mandioca, coffee, wheat, olives, the mamon, from 
which papain is extracted, coco, ramie, barley, peanuts, vanilla, 
cinnamon, grapes, tartago, from which we get castor oil, the poroto, 
garbanzos, etc., etc., and the numberless varieties of cultivated and 
uncultivated fruits, whose exportation to the neighboring countries 
is limited only by the lack of adequate means of transportation. 

One-half of the total area of Paraguay, approximately, is occu- 
pied by forests, in part yet virgin, which contain an incalculable 
wealth in woods, — for construction and for cabinetmaking — the most 
appreciated in America. Their simple enumeration would exceed in 
extent the limits of this sketch ; I shall, for this reason, confine myself 
to the mention of those best known, which have already been the ob- 
jects of commercial activity in the places accessible to means of trans- 
portation; the curupay, of almost indefinite durability, remaining 
intact in the water or underground and against the inclemencies of 
the weather ; its bark is utilized, with excellent results, for the tannin 
that it contains ; the lapacho, comparable to the preceding for its du- 
rability and resistance, with the advantage of its greater flexibility 
and adaptability, in consequence, to certain special uses, construction 
of boats, railway coaches, etc. ; the incienso, used in the manufacture 
of furniture, is strong and flexible, and is known for its character- 
istic odor; the ibiraro, very elastic and tough, although less hard 
than those preceding, is fit for the building of boats and railway 
coaches, with advantage equal if not greater than teakwood ; the 
cedar, very large and abundant, may well take the place of mahogany 



598 PAN AMERICAN FINANCIAL CONFERENCE. 

and walnut in the finer grades of cabinetmaking, easy to work and to 
polish, it is never attacked by insects ; the petereby, a tall, straight, 
beautiful tree, is much used in cabinetmaking, and sometimes in the 
construction of railway coaches ; the ibyrapyta, very common, is suit- 
able for paving blocks ; the timbo, of a beautiful reddish color, for its 
qualities, as well as for its abundance and cheapness, is used many 
times in place of pine; the laurel, retaining its soundness in water 
and underground, is used for railway ties and in the construction of 
boats; the guayaybi, very elastic, flexible and very durable, is used 
for tool handles and in the manufacture of carriages and wagons; it 
is superior to the North American hickory ; the palo santo, very fra- 
grant and resinous, is suitable for axle bearings, in place of metal; 
the curapayra; the urundeymi ; etc., etc. 

Worthy of particular mention is the quebracho, which in some 
regions forms heavy forests, of which many are as yet untouched on 
account of their remoteness from means of transportation. Its great 
industrial value as a source of production of tannin, as a wood for 
construction, and, above all, for its qualities incomparable for rail- 
way ties is well known to all. 

The mention of dye, textile, and medicinal plants that, through 
their uses, abundance, and variety, might be the object of profitable 
exploitation — as yet not begun — will complete this sketch, too sum- 
marized, of the sylvan wealth of Paraguay. 

Among the numerous resources on which my country depends, 
cattle raising is one of those that up to the present time has proven 
most profitable, although on a scale as yet very remote from the 
extent and conditions under which it will be able to yield all its 
advantages. 

With abundant pastures of the first quality, with sufficient water 
and the natural shelter that the forests offer, with a salubrity unex- 
celled, the prairies of Paraguay constitute, in the words of a resi- 
dent, " the ideal land for the breeding and fattening of live stock." 
The interest that this industry has aroused of late among North 
American capitalists is an omen of an early increase, and a promise 
of new and fruitful undertakings. 

In this connection we may refer to the Paraguay Land & Cattle 
Co. with large tracts of land in the Chaco, in full operation and 
prospering, and to the Chaco Land & Cattle Co. of Paraguay which 
is now in active organization. A North American concern has 
lately applied to the Congress for the necessary concession for the 
establishment of a refrigerating plant, which concession will surely 
be granted. 

The minerals best known and most abundant in Paraguay are: 
Iron, manganese, and copper, at the present time unworked, although 
one of them, especially manganese, might well be exploited with 



MEMORANDUM BY PARAGUAY. 599 

profitable results. The dearth of careful scientific data does not 
permit the affirmation, in a positive manner, of the existence of 
other minerals, or the estimation of their extent. 

The most important materials for construction are lime and ce- 
ments, which, according to repeated analyses, contain more calcium, 
silicate, and aluminum than their similars elsewhere, and, on the 
other hand, are found free from deleterious or unnecessary sub- 
stances; also Portland stone and prepared Portland, clays for 
earthenware and fire brick, kaolin, hydraulic stone, and flagstone. 

Among the ornamental stones in the pavilion of Paraguay, at the 
exposition at Buenos Aires in 1910, were exhibited 19 speci- 
mens of marble that were admired for their beauty and for the 
variety of their colors, 2 specimens of slate, 2 samples of agate, and 

1 Of NOBLE SERPENTINE. 

Because of her meager capital and slender population, the in- 
dustrial life of Paraguay has hardly begun, in spite of the extensive 
and varied opportunities for exploitation afforded by her innumerable 
natural resources. 

The undertakings that we might cite as unfolding their activities 
are almost all in the forest industries. They are, in the tannin in- 
dustry, those of: Puerto Casado, one of the most important of its 
kind in South America, with the most improved machinery and a 
capacity for producing 450 tons of extract each month; Puerto 
Sastre, with equipment for working 1,000 tons of extract monthly; 
Puerto Max and Puerto Maria, belonging to the same company, 
with machinery of the highest grade and capable of producing 700 
tons per month; Puerto Galileo, one of the most nearly perfect 
equipments and a producing capacity of 750 tons; and others be- 
sides. 

Among the exploitations of wood for export there figure in first 
importance the plants of: Nogues, with 15 leagues of heavy forest, 
from which they cut and prepare upward of 10,000 beam timbers 
per year, its sawmill making a specialty of the preparation of rail- 
way ties ; Pinasco ; the Sociedad Forestal del Paraguay ; Cogorno ; 
the American Quebracho Co., with extensive properties on the 
River Paraguay and at Puerto Medanos, with a numerous popula- 
tion (400 peons are constantly working in its very rich plants) ; the 
Colonia Uruguaya ; Fasardi y Compania ; the New York & Paraguay 
Quebracho Co.; the River Plate Quebracho Co., etc. Almost all of 
these have their own railways intended for the transportation of the 
wood to the ports of shipment. 

The only extensive exploitation of Yerba Mate is carried on by the 
enterprise known as the Industrial Paraguaya, which, starting with 
a capital of $1,000,000, has been able to return to its shareholders, in 
the shape of dividends and in the term of only 10 years, five times the 



600 PAN AMERICAN FINANCIAL CONFERENCE. 

value of the shares. At present its properties are valued at about 
4,000,000 pesos gold. 

The country contains only two packing houses — that of Risso and 
that of San Salvador — they being able to turn out annually, the for- 
mer 50,000 head of cattle and the latter 30,000. In this latter is 
prepared, in addition ,a beef extract of excellent quality. 

Among the industries that have as a basis the raw materials of the 
country we must finally mention the sugar mill of Tebicuari, located 
on the banks of the river of the same name, with machinery of the 
first quality and with its own plantations, which during the past year 
provided it with 15,731 tons of sugar cane, approximately the half 
of its consumption. 

Two noble rivers, the Paraguay and the Parana, place the Republic 
in communication with the ocean through the ports of Buenos Aires 
and Montevideo. Divers companies maintain a regular and perma- 
nent service between these cities and the littoral of Paraguay with 
luxurious and commodious steamers for passengers and freight. 

A railway equipped with every modern convenience has lately 
been inaugurated between the cities of Asuncion and Buenos Aires, 
crossing the Paraguay by means of a ferry. 

Without counting the local railways, almost all annexed to the 
plants of the timber industry, there is now under construction an 
important road which, leaving Asuncion, extends to Parana, oppo- 
site to the falls of the Yguazii, at which place it will connect with 
a Brazilian line, extending from the Atlantic. 

Other concessions of like character have been granted or solicited 
from the Congress, although none of them has yet passed to a state 
of consummation. 

As means of transportation in the interior, there exist numerous 
rivers, which for the greater part require cleaning and canalization 
in order to be utilized to their full extent. 

An official institution, the Departmento de Fomento (National 
Development Department), with its directing personnel constituted 
almost entirely of technicians coming from the North American 
universities, has charge of the construction and maintenance of the 
bridges, roads, canals, ports, etc., with which the Government is 
especially concerned. 

Various of the ports are in course of construction or enlargement, 
and the well-known house of MacArthur Bros., of New York, will 
take charge very soon of the works of the great port of Asuncion. 

The banks all have their principal seat at the capital of the Re- 
public, and some of them branches in the interior cities. Such are 
the Banco de la Repiiblica, with an authorized capital of $20,- 
000,000 gold, of which there are already $6,000,000 subscribed; the 
Banco Mercantil del Paraguay, with an authorized capital of 



MEMORANDUM BY PARAGUAY. 



601 



25,000,000 pesos paper, and 20,000,000 paid in; the Banco de 
Espana y America, a branch of the institution of the same name 
established in Buenos Aires, with a capital of $2,200,000 gold. These 
are all dedicated to banking operations in general : The discount of 
bills and notes, current accounts, savings accounts, time deposits, 
drafts on the exterior, etc. 

The normal banking rate is 12 per cent annually. 

The Banco Agricola is an official institution that is authorized 
not only to aid farmers and manufacturers with loans at a reduced 
rate of interest but to plan the extension and improvement of culti- 
vation by means of encouragement, advice, and instruction. It 
has already influenced to a marked extent the agricultural progress 
of the country. Its capital, 15,000,000 pesos legal money, has lately 
been increased by 15,000,000 more. 

The foreign commerce of Paraguay is increasing from year to year, 
rapidly and progressively, and from this point of view it is inferior 
to no other American or European country. The total figure of 
this commerce for the year 1913 is $13,539,744 gold, while that of 
the year 1904 is only $6,761,991, that is to say, an increase in the 
decade of 100 per cent, more or less. 

Here is a table showing this movement, most significant in itself: 



Year. 


Importation. 


Exportation. 


Year. 


Importation. 


Exportation. 


1904 


S3, 565, 731. 00 
4,678,314.25 
6,324,283.93 
7,512,502.04 
4,072,953.04 


$3,196,260.00 
2,833,009.21 
2,695,047.49 
3, 236, 109. 63 
3,867,094.50 


1909 


$3,787,951.28 
6,419,412.96 
6,694,995.63 
5,350,600.13 
8,119,997.09 


$5,136,638.62 


1905 


1910 


4,916,918.25 


1906 


1911 


4, 735, 572. 83 


1907 


1912 


4, 235, 723. 36 


1908 


1913.... 


5,630,929.13 







In the year 1914 the effects of the European war made themselves 
felt immediately, reducing the imports to $5,149,464.99 and the 
exports to $4,584,358. 

The articles of importation come principally from Germany, Eng- 
land, Argentina, France, Spain, and Italy and consist for the greater 

part Of TEXTILES, FOODSTUFFS, HARDWARE, ARTICLES OF FASHION, WINES, 
SPIRITS, DRUGS and CHEMICALS, READY-MADE CLOTHING, CHINAWARE and 
CROCKERY, HATS, RUGS and CARPETS, FOOTWEAR, JEWELRY, and RAILWAY 

and tramway materials. It is interesting to note that in this enu- 
meration the first place is occupied by articles required for the prog- 
ress of the country — for example, wire for fences, agricultural im- 
plements, tools, sheet and bar iron, machines of every sort, elec- 
trical apparatus, articles intended for public instruction, and 
foodstuffs that are not produced in the country. 

The basis of the exportation consists in ltve stock and its by- 
products, WOOL, DRIED BEEF, ORANGES, TOBACCO, COCOANUT BRAN, 
ESSENCE OF PETIT-GRAIN, EXTRACT OF QUEBRACHO, YERBA MATE, PALMS, 

wood of every kind, etc. 



602 



PAN AMERICAN FINANCIAL CONFERENCE. 



The commercial interchange with the United States, although yet 
of minor importance, is developing with increasing progress. 
Here is a table corresponding to the last five years : 



Years. 


Importation 
from the 
United 

States. 


Exportation 
to the 
United 

States. 


1910 


861,142 
86,989 
161,661 
187,867 
173, 191 


$29, 170 

34,516 

9,443 

58,285 

64,655 


1911 


1912 


1913 


1914 





In commerce the business men of Paraguay are renowned for 
their honor, and European houses, with a knowledge of this circum- 
stance from their long years of experience, have never undergone 
inconvenience in selling to them at long credits, or in waiting pa- 
tiently for epochs of crisis to pass for the collection of their dues. 

Great failures are almost completely unknown in Paraguay, and 
even small ones are a rarity. The registers of the tribunals of com- 
merce are an honor to the country. 

The financial situation is as follows: Internal debt, balanced De- 
cember 31, 1913, total, $559,675 gold, and $11,564,572 paper. To 
this there is to be added $394,119 gold, and $33,913,373 paper, 
relating to claims for damages done to individuals during past 
epochs of revolution, which will certainly be reduced in amount 
when they are examined by the special commission that has this 
matter in charge. Once estimated and acknowledged, it will be 
consolidated in accordance with a law proclaimed on February 1 
of the current year, which fixes the interest at 6 per cent annually 
and establishes a system for its amortization. 

The balance of the debt of the treasury to the Banco de la Kepii- 
blica, of $615,995.43 gold, has likewise been adjusted by granting to 
said establishment the collection of the tax of $1 gold that is im- 
posed on the exportation of each hide until the debt shall have been 
extinguished. 

The fiduciary issue of 65,000,000 pesos has recently been increased 
by 60,000,000 more, with which the debts in paper to the Bancos 
de la Repiiblica and Mercantil were liquidated; the arrears of the 
Treasury, resulting from the decrease in the income of the Govern- 
ment since the commencement of the European war, have been met; 
there were granted 15,000,000 pesos for agricultural loans, and there 
were set aside the funds necessary for the completion of the improve- 
ment of the ports, already commenced, in certain of the river cities. 
The sum total of paper money in circulation is, then, 125,000,000 
pesos, which, reduced to gold, at the rate of 1,500 per cent — which 
will probably be that fixed by the Government as the basis for con- 



MEMORANDUM BY PARAGUAY. 603 

version — represent 8,333,000 pesos, or an equivalent of $8.33 per 
capita for the million inhabitants of my country. The ratio is 
moderate. 

The fixing and maintenance of the ratio of exchange of paper 
money is a constant preoccupation of my Government. To this end 
there were set aside the customs receipts arising from the duties in 
gold on the exportation of hides, which amount to approximately 
$300,000 annually. The sum accumulated in this way was, on Sep- 
tember 25 of last year, $1,508,684.33, of which amount, by laws of 
the Congress, there were utilized $750,856.91, leaving, therefore, in 
the coffers of the State a balance of $757,827.42.' The profound eco- 
nomic crisis of to-day has prevented the continuance of the accumu- 
lation of funds by the method referred to, making it absolutely in- 
dispensable, in consequence, to obtain a loan, which, added to the 
sum already mentioned, should satisfy the earnest wish of the Gov- 
ernment to give to the nation a sound monetary system. 

The amount of the foreign debt — arising from the loans of 1871 
and 1872, made in London — is at present $3,370,418.12, according to 
the calculations of the office of the auditor of the nation, the liquida- 
tions of the past three years not being at hand. The interest of 3 
per cent and an annual amortization of one-half per cent — which 
are the terms agreed on for this debt — have been paid scrupulously 
at all times. 

The principal sources of income on which my country depends are : 
Customs duties from imports and exports, the land tax, postal tax, 
internal consumption revenues, etc. 

The customs revenues follow naturally the movement of inter- 
national trade and thus we see that while in the year 1904 they were 
$1,423,141 gold, they increased in 1913 to $3,591,143 of the same 
money, which in the term of 10 years shows an increase of 145 per 
cent. 

The revenues derived from other sources have increased in a 
manner yet more marked than the customs revenues. They were, in 
1904, $1,459,614 legal money and, in 1913, $6,420,762. A detailed 
study demonstrates that this increase is particularly due to the taxes 
that affect commercial life. 

The present crisis has likewise produced a marked diminution in 
these figures, particularly, however, in the customs receipts. 

The Government of the Republic, accurately estimating the diffi- 
culties of the moment — so uncertain of duration — has taken re- 
course to stringent measures of economy by reducing the budget of 
national expenses to its possible limits and by suspending the comple- 
tion of divers public works until a more favorable time. 

Hector Velazquez. 
William Wallace White. 



MEMORANDUM SUBMITTED BY THE DELEGATION 

OF PERU 



605 



MEMORANDUM SUBMITTED BY THE DELEGATION OF PERU. 



The present European war has disorganized economic conditions 
the world over. In Peru, as in all civilized nations, the effects of 
the armed struggle of the most powerful peoples of Europe have 
made themselves felt with considerable severity in the field of the 
national finances. 

In an endeavor to find means to minimize the consequences of the 
economic crisis which the war has brought about in Peru, Congress, 
the Government, and the different municipalities have together 
adopted several measures of an administrative, sociological, and 
economic nature which, it is believed, will tend to regulate the 
anomalous financial condition through which the country is passing. 

When any nation finds itself confronted by a crisis such as at pres- 
ent exists in Peru it will be found that its manifestations are these : 
General mistrust as to the solvency of private individuals and bank- 
ing institutions ; disappearance of metallic currency and, above all, of 
gold coin, which is merely one effect of the preceding circumstances ; 
and a reduction in the fiscal returns, owing to the paralization of most 
of the mercantile life of the country, due in the present case to the fact 
that the exporting and importing nations of Europe are in a state 
of war. 

As a consequence of these circumstances, three means have been 
adopted to avert the effects of the crisis : The protection of banking 
institutions and private debtors threatened by the public mistrust; 
the substitution of metallic currency to prevent its disappearance 
by another less susceptible of concealment, which has, however, not 
been completely effective in the present case; and the reducing of 
State expenses, arranging the budget to meet the exigencies of the 
reduced revenue. The measures adopted in Peru for the purpose of 
minimizing the effects of the crisis have revolved around the three 
methods mentioned above. 

In accordance with the series of fundamental principles which are 
always present during times of financial stress, it is possible to 
classify the methods for obtaining relief into three groups : 

First. Methods to minimize or prevent a panic, due to the mis- 
trust of the solvency of banking and credit institutions, which is 
characterized by the immediate withdrawal by depositors of their 
funds, which always greatly affects the normal financial life of the 

607 



608 PAN AMERICAN FINANCIAL CONFERENCE. 

country. To prevent such a condition of affairs, Congress approved 
the declaring of a moratorium, which will end on the 22d of August, 
1915. 

Second. Methods for the solving of the currency problem, created 
by the disappearance of gold coin and the retention of silver. To 
this effect the Lima and foreign banks in the capital issued checks to 
bearer for the sum of $12,500,000. Other means adopted consisted 
in forbidding the exportation of gold, either coined or in bars, as 
well as that of coined silver. 

Third. Methods for balancing the budget, reducing expenses to 
the exact amount of the government revenue. For this purpose 
Congress voted a law reducing the expenses of the Republic 30 per 
cent, while the taxes on alcohol and tobacco were increased 20 per 
cent. The revenue from liquid capital and industrial taxes were 
likewise increased. 

These economies effected in the budget and the increased revenue 
from taxation mentioned above are already producing, although 
slowly, appreciable results of a favorable nature. 

Finances and Commerce. 

The national revenue of Peru, for the years mentioned below, was 
as follows : 

1896 $5, 643, 570 

1906 12, 777, 315 

1910 13, 878, 875 

1911 14, 249, 040 

1912 16, 371, 685 

1913 17, 089, 870 

The increase in national revenue in the seventeen years from 1896 
to 1913, is a little over 300 per cent. 

During the year 1914 the budget of 1913 was in force ; that is to 
say, that the budget for the said year was calculated upon and the 
revenue expected to yield the same sum as had .been required for the 
year 1913. 

The expenditure was $17,771,885. Owing to the general condi- 
tions, expenditures have been reduced 30 per cent during the present 
year. 

The following are the figures for the revenue of 1913 : 

Pacific coast customhouses $6,352,280 

River customhouses 869, 180 

Tax on spirits 1,736,220 

Tax on sugar 487,040 

Tax on matches 174,670 

Salt monopoly 1, 295, 765 

Tobacco monopoly 2, 257, 625 

Opium monopoly .__ 86, 455 



MEMORANDUM BY PERU. 



609 



Denatured alcohol tax $97,580 

Municipal excise tax 561,265 

Post offices 718, 475 

Telegraphs 173, 310 

Sundries 2, 280, 005 

$17, 089, 870 

The net revenue from the customhouses, which in 1913 amounted 
to $6,285,670, had fallen in 1914 to $4,828,250, a falling off from the 
total of the preceding year of 27 per cent, more or less, the second 
half year showing a still further reduction, which amounted to about 
47 per cent, in relation to the second half year of 1913. 

Other government means of revenue have likewise suffered a per- 
ceptible decrease, although not so considerable as that noticed in the 
customhouse receipts. The tax on spirits, which in the second half 
year of 1913 produced $1,015,210, in the corresponding period of 
1914 produced $835,715, a reduction of $179,495, equal to 22J per cent. 
The tobacco monopoly, which in the second half year of 1913 pro- 
duced $1,233,165, in the corresponding period of 1914 produced 
$1,136,995, a reduction of $96,165, equal to 7J per cent. The total loss 
on taxes during the second half year of 1914 compared with the 
corresponding period of 1913 has been the sum of $592,855. The 
net revenue from all taxes during the second half year of 1913 was 
$3,863,500. 

This falling off in the public revenue, which had not been accom- 
panied by a corresponding and proportional reduction in the Gov- 
ernment expenses, brought about a situation of exceptional serious- 
ness. It is confidently expected, however, that once the methods 
adopted for the restoring of public confidence and meeting the 
unusual conditions which are affecting the revenues of the country 
will have been given time to work there are better days in store for 
the commerce of Peru. 

There is no export duty on Peruvian products, with the exception 
of that on india rubber and gold bars. 

The following figures give the result of Peru's imports and exports 
during the ten years from 1904 to 1913 : 



Years. 


Imports. 


Per cent. 


Exports. 


Per cent. 


Total. 


1904 


$21,786,690 
21,788,480 
25,052,480 
27,598,755 
26,559,865 
21,493,135 
24,902,485 
27,191,225 
25,701,690 
30,443,880 


51.72 

43.08 
46.80 
49.00 
49.23 
39.83 
41.32 
42.29 
35.26 
39.99 


$20,333,195 
28, 786, 750 
28,479,395 
28,722,720 
27,394,795 
32,463,350 
35,370,380 
37, 110, 135 
47, 192, 905 
45, 688, 90Q 


48.28 
56.92 
53.20 
51.00 
50.77 
60.17 
56.68 
57.71 
64.74 
60.01 


$42,119,890 
50, 575, 235 


1905 


1906 


53,531,875 


1907 


56,321,480 


1908 


53,954,570 
53,956,490 
60,273,865 


1909 - 


1910 


1911 


64,301,365 


1912 


72,894,600 


1913 


76,132,785 








252,519,715 




331,542,460 




584,062,180 









98257°— 15- 



-39 



610 PAN AMERICAN FINANCIAL CONFERENCE. 

The proportion of imports to Peru from the United States is 28 
per cent, and the exports from Peru to this country 33 per cent. The 
increase in the total of Peru's commerce with foreign countries dur- 
ing the 10 years mentioned previously is more than 90 per cent. 

The most important products exported are copper, cottons, sugar, 
petroleum and its derivatives, silver, rubber, wools, hides, gold, 
guano, and straw hats. 

The imports which may be considered of most importance are ma- 
chinery for agricultural purposes and allied industries, coal, cotton, 
linen, woolen and silk goods, corrugated iron in sheets, pig iron, 
timber, wheat, paper plain and printed. 

The principal nations from which Peru imports these articles are 
Great Britain, United States, France, Belgium, Italy, Chile, and 
Germany. 

The nations to which her exjDorts are principally consigned are 
Great Britain, United States, France, Belgium, Chile, Germany, and 
Bolivia. 

THE NATIONAL TAX COLLECTING CO. 

The collection of taxes in Peru, with the exception of the salt 
monopoly, is farmed out to the National Tax Collecting Co., which 
charges 1 per cent on the revenue of the branches it administers, 6 
per cent for collecting license fees in Lima and Callao, and 10 per 
cent for the administration of the piers at the ports of Tumbes, Supe, 
and Chala. 

The capital of this joint-stock company is $1,500,000. 

During the year 1913 this company collected $5,400,855 worth of 
taxes on the following products : 

Tax on alcohol $1,736,220 

Tax on sugar 487,040 

Tax on matches 174, 670 

Tobacco monopoly . 2, 257, 625 

Opium monopoly 86, 455 

Denatured-alcohol tax 97, 580 

Municipal excise tax 561, 265 

Total $5, 400, 855 

THE NATIONAL SALT CO. 

This is another joint-stock company which controls all the salt 
mines and deposits in Peru. It is also a fiscal company, organized 
for the purpose of obtaining and selling salt. Prices are fixed by the 
Government, the company working on the basis of a 5 per cent com- 
mission. 



MEMORANDUM BY PERU. 611 

THE NATIONAL DEBT. 

On the 30th of July, 1913, the internal debt of Peru stood as fol- 
lows : 

Consolidated notes, 1 per cent interest $13,303, 225 

Redeemable bonds, no interest, but with a yearly amortization 

of $125,000 5, 671, 050 

$18, 974, 275 

Market value: 

$13,303,225, at 141 per cent $1, 928, 966 

$5,671,050, at 10 per cent 567, 105 

2, 496, 071 

Loan, 1913, guaranteed by the alcohol tax, at 6£ per cent 1, 000, 000 

Loan, 1914, same guarantee, also 61 per cent 1, 000, 000 

Loan through the German Bank at 94, bearing 51 per cent interest, 

guaranteed by the Salt Monopoly 6, 000, 000 

Loans from local banks $2, 699, 000 

Debt to Schneider & Co., of Paris : 1, 255, 000 

Claims and special debts 8, 257, 215 

Local loan from National Tax Collecting Co., Lima 6, 225, 000 

18, 436, 215 

$28, 932, 286 

The population of Peru being 4,500,000, the per capita proportion 
is therefore about $6.50. 

BANKS IN PERU. 

There are at present five banks which do business in Peru, as fol- 
lows: 

The Banco del Peru y Londres Peruvian. 

Banco Internacional del Peru Peruvian. 

Banco Popular Peruvian. 

Banco Italiano Italian. 

Banco Aleman Transatlantic, a branch of the Deutscher Bank of 

Berlin German. 

CAPITAL. 

Banco del Peru y Londres: 

Paid-up capital $2, 500, 000 

Reserve fund 1, 500, 000 

Banco Internacional : 

Authorized capital 2, 500, 000 

Paid-up capital 500,000 

Reserve fund 125, 000 

Banco Popular: 

Authorized capital 1, 000, 000 

Paid-up capital 750, 000 

Cash reserve fund 310, 000 



612 



PAN AMERICAN FINANCIAL CONFERENCE. 



Banco Italiano : 

Paid-up capital $1,000, 000 

Reserve fund . 446, 650 

Sinking fund : 75, 000 

Banco Alenian Transatlantic©, for the purpose of transactions in 
Peru 1, 000, 000 

The following was the condition of the five banks on December 31, 
1914: 



Demand 
deposits. 



Time 
deposits. 



Advances, 
discounts, 
invest- 
ments. 



Peru v Londres 

Aleman 

Italiano 

Popular 

Internacional... 



$3,680,165 

2,151,985 

3,020,705 

610,595 

234,005 



$5,896,190 

3,341,455 

2,478,410 

1,099,440 

312, 695 



$13,762,190 

5,480,280 

4,063,380 

2,109,125 

530,830 



$9,697,455 



$13,128,190 



$25,915,855 



On hand. 



Banks. 


Gold. 


Silver and 
copper. 


Checks. 


In banks 
in Lima. 


In banks 
abroad. 


Peru y Londres 


$42,200 

343,135 

136,090 

9,720 

6,920 


$415,465 

155,040 

104,940 

7,700 

480 


$1,511,345 

1,282,945 

1,942,170 

582,655 

198,945 


$113,360 
31,990 
151,285 
118,225 
10,395 


$113, 365 


Aleman 


382, 490 


Italiano 


102, 780 


Popular 


49,560 


Tntprnarinnnl , 


6,240 






$538,065 


$683,625 


$5,518,060 


$425,255 


$654,435 



The Government does not interfere in the fixing of the rate of 
exchange. At the present time drafts on London at 90 d/s are 
quoted at 7J per cent premium per Peruvian pound, instead of one- 
half to 1 per cent, as is charged during normal conditions, owing, 
principally, to the want of bottoms to carry products to foreign 
markets. Eates of interest in Peru are stipulated by contract. 
When no such stipulation exists, a higher rate than 6 per cent, which 
is the legal rate, can not be charged. 

The guaranties which are required upon soliciting loans are (a) 
personal, (b) collateral, and (c) mortgages. Personal guaranties 
are the signature of the borrower and those of his guarantors prom- 
ising to cancel his obligation; collateral explains iteelf ; and mort- 
gages require the inscription in the real estate registers of the loan 
which is guaranteed by the mortgage on the property which is 
offered as security. 

The time granted for the fulfillment of loans on signatures or col- 
lateral is generally 90 days, which may be extended on renewal; 
loans on mortgages are generally for terms of from 2 to 21 years, 
loans being sometimes effected for more extended periods. 



MEMORANDUM BY PERU. 613 

There is no bank authorized to issue notes, nor would permission 
to issue such currency be easily conceded. At the present time, for 
the purpose of facilitating commercial transactions, and due also to 
the withholding of gold coin consequent on the state of war in 
Europe, laws have been drafted authorizing the banks to issue bearer 
checks to the amount of $12,500,000 under the strict supervision of 
a vigilance committee formed for the purpose. This issue, to which 
the banks have subscribed, is guaranteed in the following manner: 
(a) 20 per cent in gold; (b) 30 per cent in mortgage bonds, war- 
rants, etc. ; (c) 50 per cent in commercial paper, listed on 'change, as 
well as different stocks accepted by the committee. 

There is no special authorization required for the establishment of 
a bank. According to paragraph 11, article 21, of the Peruvian Com- 
mercial Code — 

Foreign associations which wish to establish themselves in Peru shall produce 
and enter in the register a certificate issued by the Peruvian consul that they 
are constituted and authorized in accordance with the laws of the respective 
countries, in addition to their constitution and the documents required for 
Peruvian associations. 

And according to article 185 of the same code — 

All banks must have in their vaults at least one-fourth in sterling of the 
amount of their indebtedness to the public. 

For the fulfillment of the legal obligation of inscription banks 
must pay from one-fourth to one-half per thousand, calculated on 
the amount of the declared capital; and further, they, as all other 
industrial concerns, are required to pay to the Government the right 
to transact business which is calculated at the rate of 5 per cent on 
the net earnings. Branches, when established, must have a perma- 
nent representative body, according to their statutes, resident in the 
country. The branch of an American bank would be most favor- 
ably considered by the commerce of the nation. The business of 
exchange is generally conducted by banking institutions directly with 
their clients. There is no need of obtaining a special permit such 
as brokers require so as to carry out such transactions. Other banks 
are the Banco de Deposit os y Consignaciones (Deposits and Con- 
signments) , which was founded with a capital of $500,000, subscribed 
by the banks in Peru; this institution represents in Peru what the 
clearing house is to New York. The daily transactions are, on an 
average, $1,000,000. The " Caja de Ahorros de Lima " (Lima Savings 
Bank) has a capital of $100,000, and has over $1,000,000 in deposits. 

The dividends paid by the banks in Lima in 1913 were as follows : 

Per cent. 

Banco del Peru y Londres 14 

Banco Italiano 8 

Banco Ponular 12 

Banco Aleman (no data available). 



614 PAN AMERICAN FINANCIAL CONFERENCE* 

CURRENCY. 

During 1*914 the Government mint (Casa National de Moneda) put 
into circulation the following : 

Peruvian gold pounds 124, 412 

Peruvian silver dollars 1, 143, 527 

The legal standard in Peru is the Peruvian gold pound, equivalent 
in value to the British pound sterling. Each Peruvian pound is 
worth 10 silver dollars or " soles," and each dollar or " sol " is worth 
100 copper cents or " centavos." 

Gold currency being withheld during the present crisis, bearer 
checks have of a necessity taken its place in all transactions. These, 
as has been mentioned, are guaranteed in the fullest manner and 
have an equal redeeming value as the Peruvian gold pound, which 
is equivalent to $4.8665 American. 

FOREIGN TRADE. 

An increased foreign trade with Latin America will be attained 
only in the proportion of the permanent investments of American 
capital which will and can be made in all such non-manufacturing 
countries as Peru whose trade is sought. Without such financial 
assistance, which has hitherto been, received from Europe, the im- 
portant purchases of American commodities are restricted. 

Unless this is done, upon the cessation of hostilities, when Europe 
shall have once more found her bearings, our markets will be recov- 
ered by the nation which will recuperate quickest and resume its 
former connections, as well as that which is financially strongest 
and therefore able to help Latin American countries to develop their 
industries and markets. The mere manufacturing of goods and a 
willingness to exchange them for cash in hand, or even on reasonable 
terms of credit, are not sufficient to stimulate an increase of American 
exports. 

American financiers must help Latin American countries to aug- 
ment their purchasing power. This can only be done if America is 
willing to devote money to buying their products and for investment 
in the extension of their railways, the encouragement of agricultural 
and mining industries, the development of water-power enterprises, 
irrigation works, and the like. 

The establishment of an American bank in Peru is likewise ur- 
gently required, since this would facilitate commercial transactions 
and direct banking exchange with the United States. Without this 
most important condition there will never be any firm foundation 
upon which to build up the desired permanent commercial reci- 
procity between our countries. It is also unquestionable that the 



MEMORANDUM BY PERU. 615 

furtherance of these intentions would be considerably assisted by 
the establishment of branches of American commission houses and 
manufacturers' agencies in Peru. 

While upon this subject we would further point out the desirability 
of establishing in Lima branches of different American manufac- 
turers whose output in the United States is insufficient to meet the 
demands of South American trade and which require raw materials 
produced in Peru. 

A brilliant future awaits the founding of agricultural and land 
and real estate banks, the want of which is acutely felt in Peru. 
These would assist the landowner and farmer to develop their hold- 
ings, increase their crops, and thus contribute to the gradual bringing 
under cultivation of the vast tracts of fertile land which at present 
lie fallow and unproductive. 

Passing to enterprises of a more ambitious nature, we would draw 
attention to the possibilities which await the construction of rail- 
ways from the coast to the interior or Amazon region, tapping the 
unexplored zones of our Tropics and carrying their produce to the 
sea. Three routes are under survey, the principal difficulty being the 
matter of capital, which, from its magnitude, should appeal to North 
American financiers. 

A direct fast passenger service, under the American flag, from New 
York to Callao, arranged so as to avoid the quarantine difficulties, 
which at present cause so much unnecessary delay by the Panama 
route, would prove of inestimable benefit. 

A considerable increase in the number of communications would, 
we are sure, attend the reduction in the present cable rates to the west 
coast, which are too high to allow of frequent use in commercial 
and private messages, especially since the difference in language 
makes the use of codes not always possible in the latter case. 

The means of utilizing the high-power wireless stations in Peru, 
in conenction with those in this country, for ordinary messages de- 
serves the attention of the committee. 

Perhaps the measure which is of more immediate necessity is that 
which deals with the condition of foodstuffs exported to Peru. It is 
well known that the laws in the United States governing this particu- 
lar matter are extremely strict, and very properly so, since the health 
of the public is directly dependent upon their observance by manu- 
facturers. Unfortunately, such is not the case when the merchandise 
is destined for export. We would earnestly draw the attention of the 
committee to the advisability of extending the requirements of the 
pure-food laws to include all foodstuffs shipped to Peru. 

(Signed) Isaac Alzamora. 

Eduardo Higginson. 



MEMORANDUM No. 1 

SUBMITTED BY THE DELEGATION OF 

THE REPUBLIC OF SALVADOR 



617 



MEMORANDUM PRESENTED BY THE DELEGATION FROM THE 
REPUBLIC OF SALVADOR. 



FOREWORD. 



If the results of the conference of the delegates from the nations 
of America gathered here are to be practical and enduring, the 
spirit of the conference should itself be practical. For this it is in- 
dispensable that its work be done for the benefit of all, frankly and 
cordially in the spirit of fraternity. 

We, in this Areopagus, should all regard ourselves as representa- 
tives of that great entity, America, pursuing the same objects of 
civilization for the social and commercial drawing together of all 
its people. Only in this way can our labors be fruitful. 

The points taken up herewith, although. in the majority having 
general application for the sister nations, are nevertheless discussed 
in detail from the point of view of Salvador. 

COMMERCIAL CREDIT. 

From time immemorial the older nations have given credit to the 
younger nations with limited resources; the credit has been ex- 
tended in different ways, but has always been a sign of prosperity on 
the part of the nation opening the door to its capital, and permit- 
ting it to seek greater reward abroad. Credit is the power which 
supports and equalizes fortunes and stimulates saving. In antiquity, 
during her prosperity, Athens advanced capital for commercial pur- 
poses to the countries of the Mediterranean. In the Middle Ages, 
and at the beginning of modern times, the same facilities of credit 
were utilized among the more advanced nations; the Dutch mer- 
chants, in their sales of merchandise throughout Europe, were ac- 
customed generally to grant a year's time for payment. 

In a country the economic activity of which is developing nor- 
mally the system of cash payment in commercial transactions, what- 
ever their nature, can not be the only way, nor indeed, the principal 
way, of buying. Cash purchase demands readiness of capital, and 
such an organization of business is only understood among primitive 
peoples. 

619 



620 PAN AMERICAN FINANCIAL CONFERENCE. 

A commercial entity's power of enlarging its possessions ought 
not to be limited to the capital represented by cash, but it should 
include the whole of its material and moral inheritance; that is to 
say, both the material values and the immaterial values which are 
the most precious — professional skill and honor. Cash sales and 
transactions are limited in the world of modern business to direct 
relations with the consumer. 

It will not be possible to extend, nor even to preserve, the present 
commerce of the United States with Salvador — and it is certain that 
the same may be said with respect to the other Latin-American 
countries — if the merchants, manufacturers, commission dealers, 
and business men of the United States, do not open extensive credits, 
in order to make all these countries valuable and important clients, 
seeing that they possess the natural resources adequate to such re- 
sult. At present, the paralysis of long-term business with the Euro- 
pean nations has caused profound confusion in the commerce and 
agriculture of our countries, and by reaction, likewise serious dis- 
turbances in the national budgets. Since there are no reasons that 
could cause capital and the value of city and rural properties to 
diminish, and since all commercial institutions remain on a normal 
basis, and since the elements of production of our countries are sound, 
it would be a lack of foresight and of financial policy on the part of 
the United States not to take advantage of these historic moments 
to assist our countries without greater distress to pass through this 
crisis, which has no origin at home; we repeat, that it would be an 
error without justification on the part of a rich nation, possessing so 
many resources of every sort. 

It is for the illustrious congress here assembled to seek the best 
means for extension of credit, as credit will be the salvation of the 
American countries in this crisis, and with the help of the Govern- 
ment of the United States this task will be lighter. 

COMMERCIAL TREATIES. 

A commercial treaty between the United States and Salvador can 
not be based on the so-called exclusive principle; it can be possible 
only in case the United States were to offer compensation for the 
advantages that we are willing to offer to American goods in our 
customs rates ; because, if we were to concede to American goods with- 
out compensation such advantages as we extend to certain French 
goods by virtue of the treaty Zaiclivar-Delcasse of 1901, we would 
lose a great part of our customs income. France has two tariff rates 
for imported foreign articles and grants us the lower one for our 
chief products, such as coffee, which pays only 136 francs per 100 
kilos. By virtue of this treaty there are 36 French articles enjoying 



MEMOKANDUM NO. 1 BY EEPUBLIC OF SALVADOK. 621 

preferential rights, and 22 articles of Salvador granted the lower 
French tariff rate.* 

In view of the foregoing information our problem is, What will 
the United States offer us in compensation for the concessions which 
we are willing to grant them ? 

MONETARY SYSTEM. 

The first function of money consists in measuring values, just as 
the meter measures lengths and the kilo weights. The establishment 
of money on a scientific basis constitutes one of the great elements 
of progress of the human mind, and age-long experience, as well as 
reason, demonstrates that coined money is merchandise with a value 
depending directly on the quantity of precious metal that it con- 
tains. History gives abundant proof that legal regulation is not 
enough to assign a value to a given coin and keep it fixed. 

It is evident that in the majority of the Latin- American nations 
one of the most serious problems that must be solved if their economic 
conditions are to be improved is that of currency. The diversity 
of intrinsic and face values, as well as the multiplicity of systems, 
makes commercial transactions even between neighboring countries 
almost impossible, except by taking as a standard the currency of 
the United States or that of the great European nations. Money 
is principally an instrument of comparison, evaluation, and enumera- 
tion; or, in other words, a common denominator. It is from this 
point of view that it has been given the name of " measure of value," 
or " valorimeter." We believe that the adoption of a single monetary 
system, established on the uniform basis of a single gold standard 
coin, is one of the greatest steps for the drawing together of the 
21 American Eepublics. Before any new system can be comfortably 
accepted it has to be tested practically. We believe, therefore, that 
a system long known and notably sound during many years would 
be preferable. The representatives of Salvador would suggest the 
general adoption of the currency of the United States by our 21 
nations. The Government of the United States could mint a coin 
with the elate of 1916 to the amount from $350,000,000 to $400,000,000 

* Our expectations of coffee to France during the last 10 years have been as follows : 



Kilos (net). 

1905 10, 282, 934 

1906 10, 302, 691 

1907 6, 428, 264 

1908 8, 217, 262 

1909 10, 143, 126 



Kilos (net). 

1910 5, 408, 761 

1911 9, 207, 073 

1912 5, 113, 356 

1913 6, 419, 723 

1914 5, 905, 665 



which leaves an annual average of 7,742,885 net kilos of coffee, without counting also 
considerable quantities of indigo, balsam, and rubber, which likewise enjoy the lower 
rates. 



622 PAN AMERICAN FINANCIAL CONFERENCE. 

that could be distributed among the twenty Latin- American Ee- 
publics in the proportion of $5 per capita. This amount would be 
paid by the respective Governments to the United States with the 
different stocks of money now existing in each country, and the 
differences that might occur would be paid within a reasonable time. 

On the 1st of April, 1912, the principal and secondary monetary 
circulation in the United States was $808,410,000, or $8.48 per capita, 
and the note circulation was, during the same period, $2,472,774,000, 
or $25.97 per capita. As will be seen, the proportion of $5 per capita 
of money that we have taken as a basis for Latin America is suffi- 
cient ; but we might very well be able to vary these figures, augment- 
ing or diminishing the quota for each country, in proportion, not 
alone taking into account the number of inhabitants, but also its 
relative wealth and commerce. 

The adoption of the currency of the United States as the legal 
currency in all independent America might be established the 1st of 
January, 1916. 

LOANS TO SALVADOR. 

The entrance of capital into new and undeveloped countries is a 
continually recurring phenomenon that will never entirely disap- 
pear, in spite of the spread of civilization over the earth, because 
the different peoples are differently endowed with the genius of 
saving, and because different countries offer different openings for 
the investment of foreign capital. In new countries the national 
capital is not sufficient for the immense task of commercial and 
economic development, and it is, besides, timid and distrustful. At 
the present moment we do not think it practicable to look to the 
American money market for favorable conditions in a loan, on ac- 
count of the excellent opportunity that is offered the money markets 
of the world, especially the American markets, as a result of condi- 
tions in Europe. 

POSTAL TARIFFS. 

A uniform intercontinental postal tariff of 2 cents (gold) for 
letters and 1 cent (gold) for printed matter and post cards, and the 
establishment of rapid and reliable service, would also be an element 
of a commercial and social drawing together of all the independent 
nations of America. We believe that the small sacrifice this would 
entail upon the treasury of the respective countries would be in- 
significant compared with the benefits that would result from the 
more intimate acquaintance with one another's resources and the 
broadening of commercial relations consequent upon such an agree- 
ment. 



MEMORANDUM NO. 1 BY REPUBLIC OF SALVADOR. 623 

WEIGHTS AND MEASURES. 

Weights and measures being one of the indispensable factors of 
commerce, it is natural that if the contracting parties have the same 
simple and practical system, it facilitates their calculations and trans- 
actions. The metric decimal system is the simplest and most scien- 
tific for all calculations; its adoption by all the nations of America 
would mean a great step toward commercial intimacy. 

TRANSPORTATION . 

The essential elements for development of import and export trade 
are low customs rates and rapid and secure communication, in order 
to carry American goods to our country and our products to the 
United States. We all know that transportation between this coun- 
try and the southern Eepublics is insecure, expensive, and inadequate. 
The United States, which is right at our doors, should give us better 
means of communication than those we have with distant Europe. 
It is essential that the United States permit their ships bound from 
their Atlantic to their Pacific ports to touch at our harbors, that 
we might have more choice of ships for travel or freight. The 
Government of Salvador will make special concessions to foreign 
steamers stopping at our ports regularly and frequently; it would 
not only not charge port duties, etc., but it would even subsidize 
such a company, according to the importance and number of ships. 

PARCEL. POST. 

The establishment of an intercontinental service for [parcels not over 
5 kilos in weighinor more than 50 cubic centimeters in volume, at a dol- 
lar rate, would facilitate many small transactions, themselves the fore- 
runners of more important orders. If we had more facilities for 
orders and for payments, a number of articles that have been com- 
ing from Europe to Salvador by parcels post could be sent from the 
United States. A system of parcels interchange between the coun- 
tries of Latin America would also be very advantageous. For ex- 
ample, there could be sent to the various Central or South American 
countries jipi-japa hats from Ecuador, perrajes from Guatemala, 
tiste or pinol from Nicaragua, and yerba mate from Paraguay, 
cigars from Cuba and Mexico, etc. To-day we are separated from 
each other less by distance than by vague knowledge of the natural 
and industrial resources and productive powers of our Latin- Ameri- 
can brothers. 



624 PAN AMERICAN FINANCIAL CONFERENCE. 

METHODS OF PACKING. 

One of the complaints that our merchants make against American 
trade is the slack and careless way of packing. Much merchandise 
reaches us in bad condition at substantial loss to us. Especial com- 
plaint is made in this regard of parcels sent by mail. It is to be 
wished that this point be considered in such a way that through 
the Department of Commerce a better method of packing be adopted 
by manufacturers and jobbers, so as to avoid notable losses to our 
merchants. 

AMERICAN BANKS. 

Before mutually advantageous business operations can be under- 
taken extensively by Americans in Salvador and the other Latin- 
American countries, we must find that element which generates the 
power that alone can realize those operations successfully. This 
power we call credit, and credit can proceed only from a banking 
establishment with capital sufficient for the needs of these countries. 

A bank founded with sufficient capital, and operating on a basis 
of liberal credit for commerce and of long-time credit at moderate 
interest for agriculture, would be the best instrument to develop 
commercial relations between the United States and our countries, 
as well as the best source of information for all enterprises desirous 
of establishing themselves among us. 

So far as Salvador is concerned we may say that the foundation 
of a bank with a capital of $10,000,000 and with a liberal credit 
policy would transform Salvador in a few years into an important 
commercial, industrial, and agricultural organism. We feel that a 
banking establishment in our country would be certain of substan- 
tial success. Like all the other Latin- American Republics, Salvador 
possesses untouched wealth, and, like them, her agriculture is still 
in a primitive state for lack of capital that might permit the under- 
taking of improvements on a large scale. As for industries, it may 
be said that they do not exist. Our Government is willing to offer 
all requisite facilities and privileges in everything purely of an 
economic and industrial character. 

GENERAL RECOMMENDATIONS. 

In conclusion, the delegation of Salvador respectfully proposes 
the following general resolutions: 

First. That American manufacturers and merchants be recom- 
mended to try in every way possible to satisfy the tastes and re- 
quirements of Latin- American commerce and consumers ; to improve 



MEMOEANDUM NO. 1 BY EEPUBLIC OF SALVADOR. 625 

methods of packing their merchandise, and to concede reasonable 
credits and terms. 

Second. That the foundation of American branch banks be under- 
taken with the support of the respective Governments, and by 
means of these branches that the attempt be made to introduce the 
monetary system of the United States in all the American Kepublics 
as the most stable basis for Pan American trade. 

Third. That the Governments of America be recommended to 
except from every tax the merchant ships of the other Eepublics, 
giving them the same treatment that they give their own ships, so 
as to create an inter- American coastwise trade. 

(Signed) Alfonso Qtjinonez M. 

Jose E. Suay. 

BoBERTO AgUILAR. 
98257°— 15 40 



MEMORANDUM No. 2 
SUBMITTED BY THE DELEGATION 
OF THE REPUBLIC OF SALVADOR 
ANSWERING THE QUESTIONS SUG- 
GESTED BY THE SECRETARY 
OF THE TREASURY 



627 



MEMORANDUM NO. 2, SUBMITTED BY THE DELEGATION OP THE 
REPUBLIC OF SAN SALVADOR, ANSWERING THE QUESTIONS 
SUGGESTED BY THE SECRETARY OF THE TREASURY. 

I. PUBLIC FINANCES. 

The European war, causing world-wide economic disturbances, has 
had a rather severe effect in Salvador. Our principal source of 
national income is the customs tariff, and that naturally is what has 
suffered most, not only because of the external troubles, but also on 
account of the lack of many products of the belligerent countries 
no longer to be had. Likewise we were affected by the shrinkage of 
credit due to internal conditions* consequent upon the war, such as 
the scarcity of drafts for foreign payments and the high rates of 
exchange. 

The import revenues of 1913 amounted to $7,263,042.98 and of 
1914 to $6,076,770.61, showing a loss of $1,186,272.37 (silver dollars— 
$0.40 gold U.S.). 

But in the year 1914 there were only three abnormal months in 
which the consequences of the war made themselves felt. Consider- 
ing the percentages of these revenues from October, 1914, to March, 
1915, the reduction is one of more or less than 40 per cent. On this 
account in the budget prepared by the Government in the month of 
April for the fiscal year beginning July 1, the income from import 
taxes has been calculated more or less on this Basis. 

The export tax had an increase during the past year of $296,533.09 
over 1913 because of the export of 130,000 quintals more of coffee 
and an increase of gold and silver exportations. The other internal 
sources of income fell off slightly, except that of alcohol, which 
suffered a loss of $281,508.77, or 10.75 per cent over the preceding 
year. 

Considering the percentage of the months already affected by the 
war and taking account of all probable contingencies — internal and 
foreign — the Government has calculated its income for the budget 
of the next fiscal year as $10,800,000 (1913, $13,734,133.46, and 1914, 
$12,423,752.88, showing a loss of $1,310,381.88) . Public expenditures 
in 1913 were $11,686,577.19 ; in 1914, $11,311,623.31. In the foregoing 
figures none of the sums have been included which were turned over 
to the Sinking Fund Commission (Cartera de Credito Publico) for 
interest and amortization of foreign and internal obligations. 

Immediately after the beginning of the war the Government took 
certain measures to deal with the fiscal situation by reducing ex- 
penses so far as possible without interfering with the administrative 

629 



630 PAN AMERICAN FINANCIAL CONFERENCE. 

requirements and needs of the country, by reducing the number qf 
employees, by discontinuing public works in part, and by reducing 
the number of assistants in the consular service. The result was a 
reduction in expenses of $374,953.88 (excluding that devoted to the 
debt— 1913, $11,686,577.19, and 1914, $11,311,628.31). 

August 11, 1914, an agreement was made with the bankers of the 
country whereby the Government might avail itself of a credit of 
$4,000,000, at 5 per cent, which it was to commence to repay a year 
after the signing of peace in Europe. In April the Government 
and the banks made a new agreement, according to which the Gov- 
ernment should no longer use this credit, releasing it for commerce 
and agriculture. In those eight months some $2,600,000 of this 
account had been used by the Government. 

In March the Government, wishing to release the banks from 
their obligation to afford the above-mentioned credit, saw itself 
obliged to suspend payments on the internal debt, to which pro- 
cedure the creditors consented. The 14th coupon of the Eng- 
lish loan of 1908, due February 15, 1915, and amounting to £43,005, 
was paid when due. We believe that the Government is taking the 
necessary steps to pay the 15th coupon (due Aug. 15). 

The Government has submitted to the National Assembly vari- 
ous projects arrived at dealing with the situation, and balancing the 
budget of the next fiscal year. The chief project is one of a general 
income tax, wherewith the Government proposes to reform com- 
pletely our economic system, and even though its effect will not be 
immediate, it is destined to replace, little by little, the tax on liquors 
and tariff rates. A tariff-reform bill was submitted lately, likewise 
with the idea of simplifying the customs fiscal system by keeping 
only the gold standard and suppressing the existing taxes, numer- 
ous and obstructive in character. 

As to questions of cooperation see the general memorandum pre- 
sented by our delegation, which treats of the cooperation of the 
United States with us in our business affairs. 

II. THE MONETARY SITUATION. 

Before the world crisis, the monetary situation of Salvador was 
good, since the banks had introduced large amounts of coin, unitary 
and fractional, at the beginning of 1914, at the time of and because 
of the failure of the so-called Banco Nacional (which has no connec- 
tion whatever with the Government), so that the (metallic) cash 
balances of the other three banks still operating June 30, 1914 (a 
month before the war began) , was $4,514,773.62. In addition to this, 
$3,000,000 had been drawn by the public from the banks in Novem- 
ber, 1913, on account of the panic due to the failure of the so-called 



MEMORANDUM NO. 2 BY REPUBLIC OF SALVADOR. 631 

Banco Nacional. The situation was ail the more satisfactory in that, 
according to bank statement of June, 1914, the note circulation of 
the three banks was only one of $3,498,329, showing a cash reserve 
of $1.29 in silver for every dollar in note circulation. 

According to bank statement of December 31, 1914, the situation 
was: Silver cash balance of banks, $3,664,937.74; note circulation, 
$6,062,601 ; that is to say, a reserve of 60 cents on the dollar, a reserve 
quite legal and adequate. 

It is entirely evident from experience that our supply of metallic 
currency is insufficient for the needs of commerce and agriculture. 

As a matter of fact, the capital of the three banks now doing busi- 
ness is $6,000,000. They may issue double their capital in notes, ac- 
cording to their concessions, on condition of having on hand 40 per 
cent (Banco Occidental and Agricola Comercial) or 50 per cent 
(Banco Salvadoreno). 

As may be seen, the total of the circulating coin and credit money 
of the banks amounts only to $10,000,000, to which we may add the 
$3,000,000 in fractional currency in the public's hands. Calculating 
the population at 1,200,000, we have, then, only $11 per capita, a 
quantity entirely insufficient, especially when it is realized that opera- 
tions by check, indorsement, or transfer very rarely occur. 

We gave in our memorandum our suggestion for the adoption of 
the currency of the United States as the legal and uniform currency 
of Latin- America. If this be not practicable, our Government will 
continue to seek a method of giving our silver standard coins a fixed 
gold value by means of a conversion fund as a preliminary step 
toward the establishment of the gold standard. 

III. THE PRESENT BANKING SITUATION. 

The banking situation is good, but as the capital of the banks is 
very limited — not sufficient for the necessities of the country — every 
business transaction is made difficult. Consequently, when the Euro- 
pean crisis occurred, and the merchant and the farmer needed more 
credit for their business and for their crops since their European 
credit,. needless to say, was cut off — the banks, in turn, cut some 
credits off entirely, and reduced others. On the other hand, the 
Government also had to have recourse to the banks in order to face 
the difficulties arising in the budget as a consequence of the reduc- 
tion of governmental revenues. Nevertheless, examining the stand- 
ing of the three banks, we may say that these institutions are solid 
and sound, so far as their own situation — that is to say, from the 
point of view of the stockholders — is concerned; but, viewing their 
situation so far as concerns general interests and the normal devel- 



632 PAN AMERICAN FINANCIAL CONFERENCE. 

opment of the country, we come to the conclusion that the banks now 
established in Salvador do not meet the needs of the day, and the 
whole nation loudly demands the establishment of a new bank, 
organized with necessary resources On the principles which regulate 
similar institutions in the most progressive countries of to-day. 

Here we can only repeat that for the development of the com- 
merce of the United States in our country the establishment of a 
new bank there is not only desirable but necessary and fitting, be- 
cause the most important interests of Salvador, as well as American 
interests there now, would combine for substantial success. 

IV. THE FINANCING OF PUBLIC IMPROVEMENTS 

and 

V. THE FINANCING OF PRIVATE ENTERPRISES. 

There are many public works of great importance to be carried 
out in Salvador, either by the Federal or municipal authorities or 
by private corporations. 

Of these proposed public works the principal are the paving and 
establishing of sewage systems in the cities of San Salvador and 
Santa Ana. The first of these projects was attempted over two years 
ago, but was never finished through lack of funds. The Government, 
the municipalities, and public utilities commission of San Salvador 
should jointly guarantee the financing of these enterprises. 

Another work of great importance, as much because of its influ- 
ence on the development of the country as because of the amount of 
capital required, is the construction of the railroad from the port of 
La Libert ad to the capital, a distance of about 50 kilometers. 

A concession has already been granted for the construction of this 
line at Government expense, but the war has come and the enterprise 
can not be carried through, due to lack of funds. 

Various other enterprises could be undertaken, for which the Gov- 
ernment could give ample guaranties, particularly in the case of 
those which might be municipal, by a system of special taxation 
which would adequately cover the economic side of the work ; 

In our national budget there is always an item called public credit, 
which has varied in the last few years from $3,000,000 to $4,000,000, 
for the amortization of the English loan and of the domestic loan 
and for the payment of the respective interests involved. 

The amount of money required to meet these loans is so great as 
to throw our budget out of balance, inasmuch as almost 30 per cent of 
the total public revenue is involved in the same. 

I have stated in a previous paragraph that, because of the war, 
the Government has been obliged to suspend payment on the domestic 



MEMORANDUM NO. 2 BY REPUBLIC OF SALVADOR. 633 

loan, but the fourteenth coupon of the English loan was paid upon 
maturity, February 15 of the current year. 

Various bills have been presented to the National Assembly in the 
current year designed to increase our public revenue and to perfect 
its collection. 

The principal of these bills is that proposing a general tax on 
revenue, which, although not capable of immediate application, will 
nevertheless serve as point of departure for general reform in our 
fiscal system, now so deficient and obsolete. 

In regard to private enterprises, there are a great many companies 
and concerns which can not operate, due to lack of necessary capital. 
There are a number of waterfalls which could generate electricity 
and power and thereby give life to many an enterprise, all of which 
have, no doubt, been prevented from being put to practical use for 
the reason adverted to above, viz, lack of capital. 

The Government on its part stands ready to facilitate in every way 
the introduction of American capital into the enterprises of the 
country and to make the necessary reform in legislation that will 
assure the creditor that the guarantees required will have the sanction 
and will be in accord with the principles of modern legislation in 
vogue among the most advanced nations. 

All that has been referred to in this paragraph may be applied to 
agriculture ; for although it is true that our farmers are making great 
efforts to better the crop and to produce more from the soil, neverthe- 
less all their efforts are handicapped through lack of capital to 
operate on a large scale, and thus the development is very slow and 
progress insignificant, whereas with sufficient capital and under 
favorable conditions our farmers could devote themselves to enter- 
prises on a large scale ; the completion of which would involve several 
years. 

VI. THE EXTENSION OF INTER-AMERICAN MARKETS. 

The base for the extension of the Pan American markets, as I 
have stated in our memorandum, is credit, but in sufficient scale — 
that is, from 3 to 12 months — because this is the inconvenience which 
all our farmers and business men meet when they try to enlarge 
their transactions with the United States. There are persons in 
Salvador who are waiting for the war to be over in order to establish 
new relations with Europe, because the markets of the United 
States are closed to them for the reason that they will not give credit. 

To facilitate acceptances and discounts the establishment of Ameri- 
can banking houses would be the best agent, and, although it is true 
that now, as well as formerly, they have handled international trans- 



634 PAN AMERICAN FINANCIAL CONFERENCE. 

actions, it has been only on a very small scale and with some diffi- 
culty, because our institutions have not all the money required and 
they lack the necessary credit avenues abroad. 

In our memorandum we proposed the adoption of the United 
States system of currency for all America. If this is not done, El 
Salvador can, by special and private arrangement with the United 
States, adopt the currency of the latter. For this, however, a bank- 
ing institution is needed with capital to supply the Eepublic with an 
adequate stock of money for the replacement of the currency now in 
use, and the furtherance of other Government reforms. This would 
give us financial strength and relieve us of the onerous burden of 
exchange, which involves such a sacrifice of our national resources. 

(Signed) Alfonso Quinonez M. 

Jose E. Stjay. 

Roberto Agtjilar. 



MEMORANDUM OF SUGGESTED TOPICS FOR 

CONSIDERATION OF THE CONFERENCE, 

SUBMITTED BY THE DELEGATION OF 

THE REPUBLIC OF URUGUAY 



635 



MEMORANDUM OF SUGGESTED TOPICS FOR CONSIDERATION OF 
THE CONFERENCE, SUBMITTED BY THE DELEGATION OF THE 
REPUBLIC OF URUGUAY. 



I. Maritime transportation. 

II. System of weights and measures. 

III. Communication by cable* — how to render it more economical. 

IV. Monetary unity, exchanges, and arbitrages. 

V. American banks. 

VI. Commercial credit — Sales on time. 

VII. Postal Union — Adhesion of the North American countries 
to the South American Postal Union in order to facilitate and 
cheapen mail service. 

VIII. Facilities through customs and in other ways for commercial 
interchange between American countries. 

IX. Interchange of students in the higher business schools be- 
tween the American countries and establishment of mercantile mu- 
seums in such schools. 

X. Necessity of diminishing imposts on the necessaries of life 
and of increasing those upon other articles. Laws for progressive 
taxes on inheritances and adoption of international measures with a 
view to avoiding fraud. 

637 



MEMORANDUM ON THE EFFECTS OF THE EURO- 
PEAN WAR SUBMITTED BY THE DELEGATION 
OF THE REPUBLIC OF URUGUAY 



639 



EFFECTS OF THE EUROPEAN WAR IN URUGUAY. 



I. First measures taken. 

At the outbreak of the war international commerce was disturbed 
by reason of the reaction of the measures adopted by all countries 
upon maritime transportations, banking credits, imports, and ex- 
ports. 

As the parties most affected by the panic were the people who had 
deposited funds in the banks and the holders of bonds, the Govern- 
ment of Uruguay issued a decree on the 2d of August prescribing: 

1. The closing of banks and stock exchange for one week. 

2. Extension of the time when commercial and banking paper 
became due until the opening of the banks. 

3. Extension for the same time of customs duties due. 

II. General measures or an economic nature. 

On August 8 the executive power introduced a bill, which was ap- 
proved, that established temporary banking regulations, in order to 
prevent the withdrawal of deposits from private banks and the con- 
version of bills at the Bank of the Eepublic. This law prescribed : 

1. That the "Banco de la Eepublica" (State bank) was author- 
ized to abstain from converting its bills for a period of six months, 
which was later extended to a period of three months after the 
termination of the European war, but limiting the issuance of bills 
to the normal proportions stipulated by the charter of the bank; 
that is to say, maintaining gold reserves equal to 40 per cent of the 
total amount of bills issued (from $10 up) besides sight maturities, 
the total amount of bills to be issued not to exceed $26,000,000, which 
is less than the amount authorized by the charter of the bank, the 
latter being three times the amount of the paid capital stock of the 
bank, provided gold reserves not inferior to 40 per cent are main- 
tained. 

2. Private banks are empowered to make use of their gold reserves, 
depositing the same in the Banco de la Eepublica up to $4,000,000, 
and receiving in exchange bills from the Banco de la Eepublica, thus 
raising the total amount of bills to be issued by the Banco de la 
Eepublica to $30,000,000 in the aggregate. 

98257°— 15 11 641 



642 PA^T AMERICAN FINANCIAL CONFEEENCE. 

3. From the $26,000,000 in bills issued for the general transactions 
of the Banco de la Eepiiblica, $4,000,000 were to be applied to the 
rediscount of commercial paper existing in private banks. 

4. The bills of the Banco de la Eepiiblica were accorded cancelling 
power. - 

5. The postponement for a period of two months for the fulfill- 
ment of judgments for public sales in all proceedings and the validity 
of conditional contracts of sale for a like period. 

6. The postponement for one month of the dispossession of those 
who delayed payments. 

7. The prohibition of the exportation of gold. 

III. Results or the measures adopted. 

The conditions of the banks in July were ; 

Deposits in current accounts : 

Banco de la Republica $6,945,863.00 

Private banks 13, 025, 333. 73 

Total 19, 971, 196. 73 

Term deposits and savings bank deposits : 

Banco de la Republica 5, 427, 718. 00 

Private banks 15, 966, 264. 31 

Total 21, 393, 982. 31 

Discounts and loans : 

Banco de la Republica 32, 368, 753. 00 

Private banks L 36, 508, 958. 78 

Total 68, 877, 711. 78 

Cash, gold: 

Banco de la Republica 11,692,436.00 

Private banks 5, 701, 497. 33 

Total 17, 393, 933. 33 

Small bills, silver, and nickel: 

Banco de la Republica 1, 975, 417. 00 

Private banks : 3, 233, 528. 26 

Total 5, 20S, 945. 26 

Bills outstanding : 

Large 16, 262, 750. 00 

Small 5, 337, 669. 50 

Total 21, 600, 419. 50 

The conversion of bills during the last days of July, when the pros- 
pects of war were already evident, caused the gold stock of the Banco 
de la Eepiiblica to decrease to $10,399,446, when the conversion was 
postponed by said Government decree ; large bills outstanding amount- 



MEMORANDUM BY URUGUAY. 



643 



ing to $16,165,196, together with sight obligations, $4,800,810 ; total, 
$20,966,000. Percentage of gold reserves, 49.60 per cent. 

The economic effects can be appreciated by the statements of the 
banks in July and subsequent months. 



STATEMENT OF BANKS. 

1. Deposits in current accounts : 

1914. State. Private. 

July $6,945,863.00 313,025,333.73 

August" 6,458,470.00 11,616,581.78 

September - 6,722,057.00 12,053,183.45 

October 6,943,588.00 12,238,380.72 

November 7,147,652.00 12,199,101.55 

December 7,445,191.00 11,467,164.55 

1915. 

January 7,560,010.00 12,073,655.78 

February 7,626,631.00 12,256,250.81 

2. Term deposits and savings bank deposits : 

1914. 

July $5,427,718.00 $15,966,264.31 

August 5,538,763.00 15,245,278.40 

September 4, 649, 061. 00 14, 860, 402. 74 

October .- 4,102,557.00 13,972,878.27 

November 4,107,061.00 13,411,816.13 

December 3,857,256.00 13,012,996.11 

1915. 

January 3, 706, 187. 00 12, 751, 779. 69 

February 3, 916, 577. 00 12, 518, 635. 03 



Total. 
$19,971,196.73 
18,075,051.78 
18,775,240.45 
19,181,968.72 
19,346,753.55 
18,912,355.55 



19,633,665.78 
19,882,881.81 



$21,393,982.31 
20,784,041.40 
19, 509, 463. 74 
18,075,435.27 
17,578,877.13 
16,870,252.91 



16,457,966.69 
16,435,212.03 



3. Discounts and loans. 

. 1914. 

July $32,368,753.00 $36,508,958.78 

August 35, 095, 000. 00 35,561, 287. 05 

September 35, 657, 584. 00 35, 697, 590. 61 

October 35, 743, 370. 00 35, 688, 567. 34 

November 35, 675, 535. 00 34, 170, 426. 07 

December 34,249, 523. 00 33,405,258. 93 

1915. 

January 33,117,429.00 33,052,078.98 

February 33,902,002.00 31,754,848.85 

4. Gold stock : 

1914. 

July $11,692,436.00 $5,701,497.33 

August 10,564,072.00 4,404,202.21 

September 10, 449, 514. 00 4, 710, 241. 92 

October .■ 10, 934, 871 . 00 5, 256, 203. 75 

November 11,058,870.00 5,359,509.34 

December 11, 128, 834. 00 5, 287, 441. 61 

1915. 

January 11,633,756.00 4,563,926.84 16,197,682.44 

February 12,016,561.00 4,979,156.88 16,995,717.88 

In the last tables gold in deposit held by the Banco de la Repub- 
lica from other banks and that placed in the legations is not men- 
tioned. The real gold situation of the Banco de la Republica in 
March was (to-day it is still more favorable) : 

Its own gold deposited in the bank $12,742,946 

Gold deposited in legations and consulate of New 

York l, 675, 104 

$14, 418, 050 

Gold held in trust deposited by private banks against bills 1, 587, 994 



$68,877,711.78 
70,656,287.05 
71,355,174.61 
71,431,937.34 
68,845,961.07 
67,654,781.93 



66,169,507.98 
65,656,850.85 



$17,393,933.33 
14,968,274.21 
15, 159, 755. 92 
16,191,074.75 
16,411,379.34 
16,416,275.61 



Total amount in the Banco de la Republica 16, 006, 044 



644 



PAN AMEKICAN FINANCIAL CONFERENCE. 



5. LARGE BILLS OUTSTANDING. 
[Privilege of the Banco de la Republica.] 



Against gold of 
the bank. 



Against gold in 
trust. 



Against gold in 
legations. 



Total. 



1914. 

July 

August 

September 

October 

November 

December 

1915. 

January 

February 



$16,262,750.00 
18,614,660.00 
18,587,430.00 
19,001,460.00 
19,206,010.00 
20,177,280.00 



19,176,999.20 
20,034,585.42 



$1,366,110.00 

1,000,000.00 

820,060.00 

750,260.00 

1,624,160.00 



1,523,160.80 
1,446,994.58 



$903,567.66 
11,674,474.46 



$16,262,750.00 
19,980,770.00 
19,587,430.00 
19,821,520.00 
19,956,270.00 
21,801,440.00 



21,603,727.66 
23,156,054.00 



The increase of bills outstanding during the last month is in keep- 
ing with the period of heavy exports in cattle products of Uruguay. 

At the beginning of March the Banco de la Republica maintained 
gold reserves to the amount of $16,006,044, against $23,156,054 in 
large bills outstanding. 

All the staple articles of exportation of Uruguay — that is to say, 
meats, wool, hides, grease, and subproducts — were in great demand 
from abroad, with steadily increasing prices. In order to facilitate 
these transactions, as exchanges were rendered difficult, the deposits 
of gold in the Uruguayan legations were authorized. 

IV. Foreign Trade. 
The foreign trade during the last years has been : 



Years. 


Importation. 


Exportation. 


Total. 


1909 


$36,944,106 
40,814,161 
44,798,175 
49,487,576 
50,352,901 
37,234,877 


$45,109,191 
40,935,638 
42,499,870 
48,800,744 
49,896,392 
52,418,802 


$82,053,297 


1910 


81, 749, 799 


1911 


87, 298, 045 


1912. 


98, 288, 320 


1913 


100, 249, 293 


1914 


89,653,679 






In 1915: 


2,291,542 
2,236,201 
3,114,792 
2,842,851 


6,932,240 
5,461,857 
6,084,114 
5,586,971 




















Total 


10,485,886 


24,065,182 









We see by the importations of 1914, as compared with those of the 
previous year, what was the effect of the war on such importations. 

The importations of great divisions on an average of the last years 
are: 

Per cent. 
Foodstuffs 19. 02 

Textiles and manufactures of 18. 77 

Iron, steel, and products of 11.04 

Stone, earth, glass, etc 11.10 

Lumber and woods 8.15 

Metals, not including iron - 8, 15 



MEMORANDUM BY URUGUAY. 



645 



Per cent. 

Industrial oils 3. 12 

Drugs 2. 24 

Live stock ■ 1. 94 

Other products 22. 28 

Exports : 

Live-stock products 90. 24 

Agricultural products 4. 23 

Mineral products 4. 60 

Game and fishing products .46 

Ship provisions . 47 

V. Trade Between the United States and Uruguay. 

The trade between the United States and Uruguay attained its 
highest figures in the fiscal year of 1914, wherein mercantile transac- 
tions were carried on which amounted in the aggregate to $13,356,410, 
as against $9,972,842 in 1913, $10,753,821 in 1912, $6,931,447 in 1911, 
and $11,686,041 in 1910. The following tables will give the various 
items of importations and exportations : 



Years ending on June 30. 



1910 



1911 



1912 



1913 



EXPORTS. 

Meat products 

Bones, horns, etc 

Feathers 

Guano and fertilizers 

Animal hair 

Leathers 

Refuse, tailings, etc 

Wool 

Other products 

Total 

IMPORTS . 

Agricultural implements 

Chemical drugs 

Manufactured cotton 

E xplosives 

Iron and steel wire 

Iron and steel, machinery and implements 

Manufactured leathers 

Petroleum and oils 

Paper and cardboards 

Tobacco 

Finished and unfinished lumber 

Vehicles and their parts 

Instruments for scientific uses 

Strings and ropes 

Rosin and turpentine 

Other articles manufactured and foodstuffs 

Total 



$185,631 

48,021 

2,370 

62,393 

133, 020 

5, 167, 432 

5,721 

1,779,341 

29,967 



$200,866 
66, 996 
3,195 
47,923 
103, 560 
1,009,164 
37,483 
123,665 
20,884 



$162,696 
55,716 
17,230 
28, 193 
93,274 
2,196,876 
19,388 
624,551 
33,752 



$55,588 

38,529 

27,369 

65,777 

61,062 

1,513,332 

9,092 

654, 211 

25, 737 



,413,896 



1,613,736 



3,231,676 



2,450,697 



242,582 

130,061 

84,814 

22,608 

79,918 

539,955 

170, 179 

1,171,855 

38,488 

2,305 

916,218 

169, 153 

75,961 

100, 855 

167, 759 

359,434 



393,686 

157, 103 

126,997 

156,858 

61,946 

790,812 

182,915 

1,016,335 

43,928 

3,175 

1,046,446 

357, 407 

37, 777 

146,477 

252,021 

543,828 



506, 153 

168, 169 

123,854 

51,035 

112, 184 

1,419,293 

253, 724 

1,113,588 

59,301 

1.935 

1,310,969 

511,474 

53,944 

117,202 

233,828 

843, 652 



491, 469 

166, 467 

146,344 

52,547 

88,011 

1,473,385 

297,524 

1,587,406 

53,4S3 

450 

1,288,211 

551,671 

11,489 

213,545 

260,925 

839,208 



4,272,145 



5,317,711 



5,880,325 



7, 522, 145 



$2,533,262 
75,304 
10,364 
88, 141 
50, 206 

2,782,139 
23,748 

2,118,862 
33, 118 



7,715,144 



278,652 

141,314 

102, 149 

53,625 

55, 786 

819,836 

247,737 

1,520,415 

67,546 



850, 770 
423,884 
10,095 
105,874 
130,822 
832,761 



5,641,266 



EXPORTS. 



Upon closely examining the exportation tables one can see from 
the start that Uruguay sold to the United States during the fiscal 
year of 1914 products to a greater value than during the three pre- 
ceding years, 1911, 1912, and 1913, in the aggregate. 



646 PAN AMERICAN FINANCIAL CONFERENCE. 

Meat products. — It is noticeable likewise that the designation of 
meat products appears for the first time in large amounts. During 
the first four years of the last period of five years the annual sales 
to the United States of these products of Uruguay did not reach 
more than $200,000. In 1914 this item amounted to $2,533,262. 
These figures refer merely to the direct exportations from Monte- 
video to New York from October, 1913, until June, 1914. During 
the same period there were exported to Europe meat products of 
Uruguay valued at $741,000, thus giving a total of $3,274,262, repre- 
sented by 16,388,210 kilograms. As is well known, this extraordi- 
nary increase of our sales of meat products to the American Union 
owes its origin to the last amendment of the United States tariff, 
which placed these products in the list of articles that entered the 
country free from duty. 

On account of the European war the entries of Uruguayan meat 
products went down considerably during the second half year. The 
exportations from our country are diverted to European markets, 
whose military administrations pay 2, 3, and 4 cents more per pound. 
However, the United States received Uruguayan meats for the value 
of $1,144,546 during the last six months of the year, and, moreover, 
they sold to the Governments of the belligerent countries several 
cargoes of Uruguayan meat, the same having arrived in the ports 
of the United States. 

Wool. — Uruguayan wool — which the new tariff law exempts from 
entry duties — is sold in larger quantities than ever before to the 
United States. During the fiscal year of 1914, by a direct route, 
4,180,520 kilograms were entered from Uruguay, with a statistical 
value of $2,118,862. Imported via Belgium came 920,090 kilograms 
and from the Argentine Eepublic 21,370 kilograms, with a total 
value of $883,410. Therefore during that year the United States 
bought wool in Uruguay for the amount of $3,002,272. 

The arrival of Uruguayan wool to the United States via Europe, 
paying double freight, insurance, and commissions, is due to the 
following fact: The textile industry of the United States is of a 
somewhat speculative character, and the necessity of the article 
itself can not be anticipated not even approximately by the factories. 
Thus these industrial establishments may not require large quanti- 
ties of wool at the beginning of the year at which period they can be 
acquired in Uruguay in great abundance, and may need them toward 
the middle of the year when what is stored in our country amounts 
to nothing. However, the sending of competent buyers to Mon- 
tevideo at the opportune time will contribute to give considerable 
expansion to this trade. • 

Hides. — During the fiscal year of 1914, 6,499,340 kilograms of cat- 
tle hides from Uruguay were imported to the United States, valued 



MEMORANDUM BY URUGUAY. 



647 



at $2,782,139, which are the highest figures of the five-year period 
with exception of the year 1910, in which year, on account of the 
abolition of the customhouse . duties on hides these products were 
received for the sum of $5,167,432 with a weight of 13,971,930 kilo- 
grams. By way of Europe in 1914 there also entered from Uruguay 
hides in quantities impossible of ascertaining with accuracy, but 
whose value was not below $500,000. 

As far as the second half year of 1914 is concerned, be it on account 
of the new necessities brought about by the European war or for 
other reasons, the volume of Uruguayan hides purchased by the 
United States was three times as much as that of the previous simi- 
lar period in the preceding year, but with a decrease in its value. 
The 856,440 kilograms of 1913 are worth, statistically speaking, 55 
cents, and the 2,361,220 kilograms of 1914 were calculated at 42 cents. 

Other, products. — The exportation of fertilizers shows the highest 
value in the five-year period— $88,141 in 1914 against $65,777 in 1913. 
The same thing happened with the bones, horns, etc., whose highest 
figures were $75,304 in 1914 and $66,996 in 1911. The exportation 
of animal hair decreased without interruption from $133,020 to 
$50,206 in the extremes of the five-year period. The exportation of 
ostrich feathers also decreased as compared with those of the two 
previous years, but shows considerable increase in the second half 
year. 

In short, the real purchases made by the United States in Uruguay 
in 1914 can be summarized as follows : 



Products. 


By direct 
route. 


By indirect 
route. 


Total. 


Meats 


$2,533,262 

2,118,862 

2, 782, 139 

280,881 


$741,900 
883,410 
500,000 
300,000 


$3,275,162 


Wool 


3,002,272 

3,282,139 

580, 881 


Hides 


Other articles 






Total 


7,715,144 


2,425,310 


10, 140, 454 







IMPORTS. 

Importations. — The effects and consequences that the European 
war had on our country, the principal characteristic of which was 
the forced restriction of credit of the banking institutions, are 
clearly reflected in the importations of 1914; that is to say, the pur- 
chases made by Uruguayan merchants in the United States. The 
trade of Uruguay with the United States decreased not only because 
its buying capacities were diminished but also because it placed itself 
in harmony with the whole world ; that is to say, in a situation of 
prudent expectancy. It imported from the United States less iron 
and lumber, because probably the erection of buildings decreased in 
importance ; less machinery and iron and steel, because its industries 
did not increase their volume of production, and even possibly de- 



648 



PAN" AMERICAN FINANCIAL CONFERENCE. 



creased. On the other hand, Uruguay maintains its large purchases 
of petroleum and oils, and also its most modest acquisition of chemi- 
cal and drug products, because it is not possible to do without those 
elements of necessity which are indispensable in the existence of all 
enlightened nations. 

The orders of Uruguay reach $5,641,266 — that is tc say, $1,880,879 
less than in 1913 and $1,239,059 less than in 1912. Petroleum and 
oils reach the sum of $1,520,415, which is approximately the aggre- 
gate of the previous year and $406,827 more than in 1912. The im- 
portations of iron and steel, machinery and implements, decrease to 
$1,473,385 in 1913, to $819,836 in 1914, and the unfinished and finished 
lumber from $1,288,211 to $850,777. Vehicles and their parts slightly 
decrease from $551,671 to $423,884. In implements and agricultural 
machinery a considerable decrease is likewise noticeable; the numbers 
are, respectively, $491,496 and $278,652. The same thing happens 
with sisal grass and twine, which decrease from $213,545 to $105,874; 
rosin and turpentine from $260,925 to $130,822; iron and steel wire 
from $88,001 to $55,786 ; and manufactured cotton from $146,344 to 
$102,149. Instruments of scientific use and manufactured hides are 
maintained at their customary amounts. Paper and cardboard rise 
from $53,493 to $67,546. The importations of tobacco are so insig- 
nificant that they are no longer mentioned in the statistics of 1914. 

Viewed as a whole, our sales to the United States amount to 
$10,140,454 and our purchases to $5,641,266. Therefore Uruguay gains 
in its mercantile transactions with the American Union $4,499,188 
in the fiscal year of 1914. This balance in favor of our country 
reaches nearly $10,000,000 in the calendar year of 1914, for accord- 
ing to the last official data of the United States our sales increased 
up to $14,000,000 and our purchases hardly exceeded $4,000,000. 



VI. Financial Situation. 

The economic situation of Uruguay was satisfactorily relieved. 
The financial situation, however, presented the following adverse 
features : 

The revenue of the country was decreasing, particularly the cus- 
toms receipts, as can be seen by the following table : 



Months. 



July 

August 

September. 
October — 
November . 
December.. 
January — 
February.. 

March 

April 



1913-14 



$543, 729 
1,243,986 
1,323,199 
1,412,591 
1,058,972 
1,534,264 
948, 330 
1,049,432 
1,700,939 



1914-15 



Soil, 274 
915,237 
898,461 
848, 157 
694, 115 
951,121 
698, 298 
766, 872 
1,450,732 
1,032,702 



MEMOKANDUM BY URUGUAY. 



649 



The total revenue (customs duties, direct, and internal taxes, 
etc. ) showed the following figures : 



Months. 



July 

August 

September. 

October 

November. 
December. 
January ... . 
February. . 
March 



1913-14 


1914-15 


$849,637 


$806, 203 


2, 104, 270 


1,959,624 


2, 656, 608 
2, 136, 783 


1,864,324 
1, 525, 039 


1,691,081 


1,244,289 


2,218,913 


1,494,834 


2,135,328 


1,674,789 


2, 496, 444 


2, 436, 825 


3, 788, 260 


3,488,016 



Difference. 



$43, 434 
144,652 
792, 284 
611,744 
446, 792 
724,079 
460, 539 
59,619 
300,244 



Totals* 

From July, 1913, to March, 1914 $20, 077, 330 

From July, 1914, to March, 1915 16, 493, 941 

Difference 3, 583, 389 

FINANCIAL LEGISLATION. 

The charter of the Banco de la Republica stipulated that from the 
yearly profits 50 per cent should go to the Government Treasury as 
general revenue and 50 per cent should remain with the bank and 
as a surplus increase the amount of its capital. New legislation was 
sanctioned empowering the Banco de la Republica to retain the whole 
of the profits (100 per cent) and increase with it the capital and 
therefore the loaning power of the bank for the benefit of trade and 
industries. 

The profits of the bank in 1914 were $1,200,000, and its capital was 
raised to $13,262,000, all paid in. 

The increase of capitals by means of accumulated profits since 1910 
has been thus : 

1910 $8, 195, 358. 06 

1911 9, 247, 650. 96 

3912 11, 075, 872. 99 

1913 12, 062, 757. 88 

1914 13, 262, 757. 88 

The financial capacity of the bank saved the economic situation 
of the country. 

In September a law was promulgated authorizing the floating of 
an internal loan amounting to $4,000,000 at 8 per cent interest and 
6 per cent for sinking fund. $1,000,000 were intended for public 
works, roads, and schools ; $3,000,000 to meet the decrease in the cur- 
rent expenses of the budget, payments of works of public utility con- 
tracted by former administrations, and the purchasing of the 
mortgage bank. 

The interest of 8 per cent was fixed because the loan was issued 
at par and the prevailing commercial and banking interest was as low 
as 9 and 10 per cent at that time in Montevideo. 



650 PAN" AMERICAN FINANCIAL CONFERENCE. 

To meet payments of interest of this loan, called "Vales del 
Tesoro," the following taxes were imposed : 

(a) An increase on the inheritance tax. 

(b) A tax on the export of live stocks. 

(c) Tax on statistics (an import and export tax based upon the 
statistical tariff). 

(d) An increase in the taxes on wines. 

In order to create new general revenues, new taxes on spirits, 
cigars, cigarettes, and tobacco were levied. These laws were sanc- 
tioned during the last months of 1914 and the first of 1915. As it 
always takes some time until new taxes yield full returns, and in 
order to meet pressing budget requirements, an internal loan of 
$6,000,000 has been sanctioned. The product of this loan will pay 
for improvements of the port of Montevideo (large warehouses, 
electric light and power stations, railroads, lands purchased for 
Government docks, dredging, etc.). With regard to this loan the 
immediate requirements are only $4,000,000, and there will be no 
difficulty to have them subscribed in Uruguay. Interest will be 
paid by means of a 5 per cent duty on general imports, excluding 
foodstuffs, articles imported free of duty, and those taxed not higher 
than 8 per cent. It is anticipated that these duties will yield yearly 
from $750,000 to $800,000. The taxes for both loans " Vales del 
Tesoro" (already floated) and interior debt, 1915 (to be floated), 
in the aggregate amounting to $10,000,000, will yield from $1,750,000 
to $1,900,000. 

The Government would consider the advisability of converting 
both these internal loans into external ones if a substantial amount 
of interest could be saved this way. The high interest on these loans 
is due to the peculiar circumstances created by the European war, 
and the Government has determined to reduce this interest by means 
of a new financial operation.. Its principal features might be 6 per 
cent interest and a sinking fund which would pay off the loan in 10 
or 12 years,, provided the interested parties in taking this loan would 
agree to an issue price in full accordance with the credit and re- 
sponsibility of Uruguay. 

The budget for the fiscal year 1915-16, ending June 30, amounts to 
$29,477,311.81, including interest on public debts. The revenue is 
$29,578,000, having been estimated very conservatively and the cus- 
toms duty estimates having been cut down by $5,500,000. The chief 
sources of revenues due to abnormal conditions created by the war 
are: 

Customs duties * $12, 500, 000 

Taxes on real estate 4, 400, 000 

Commercial licenses 1,700,000 

Taxes on cigars and tobacco 1,250,000 

* Custom duties yielded $17,500,000 In 1913-14. 



MEMORANDUM BY URUGUAY. 651 

Special duties for public education $960,000 

Post office and telegraph 700,000 

Taxes on alcohol 805,000 

Taxes on matches 320, 000 

Taxes on beer 190,000 

Taxes on brandy 80,000 

Taxes on sugar 260, 000 

Taxes on wines 280, 000 

Export duties on live stock 4S0, 000 

Revenue stamped paper 580,000 

Stamps 360, 000 

Consular fees 360,000 

In the revenues are included incomes directly collected by some 
Government institutions organized with capital originating in public 
debts. Thus these institutions pay themselves their share of interest 
received on public debt. For example, the Banco de la Kepiiblica, 
founded with the proceeds of a loan (5 per cent, 1896), contributed 
yearly $470,000 to the Treasury as per interest and sinking fund. 
The Mortgage Bank, which costs the State $5,000,000, contributes 
$300,000 yearly (5 per cent interest and 1 per cent sinking fund) . The 
Insurance State Bank, established on the basis of a loan of $3,000,000, 
contributes ($180,000) yearly (5 plus 1 per cent). The State electric 
light and power plants, capitalized with the proceeds of a $4,500,000 
loan, contributes $270,000 (5 plus 1 per cent). 

PUBLIC DEBTS. 

The largest debt of Uruguay is the consolidated debt, originating 
in a loan of 19,570,000 pounds sterling, 3J per cent interest and 1 per 
cent sinking fund. In 1892 the distribution of these securities was 
as follows: 



Distribution of securities. 



In Europe 

In Uruguay 

In 1915: 

In Europe... 

In Uruguay. 



Pounds 
sterling. 



16,623,460 
2,645,040 



11,474,020 
4,980,000 



Per cent. 



86.27 
13.73 



69.73 
30.27 



The consolidated debt is considered the true barometer of the 
external credit of Uruguay. It is a security highly valued by in- 
surance companies, savings banks, etc. 

During the present European war the quotations of the debt were 
around 65 per cent, thus yielding net 5.35 per cent interest. 

Next comes the conversion loan taken by the Banque de Paris et 
des Pays Bas at 90 per cent net and sold to the public at 97 per cent. 
The present circulation of these securities is : 



652 PAN AMERICAN FINANCIAL CONFERENCE. 



Distribution of conversion loan. 


Circulation. 


Per cent. 


In Europe 


$20,745,514 
8,579,000 


70.74 


In Uruguay 


29 26 








Total 


29,324,514 


100.00 







This shows that 30 per cent of the two principal public debts of 
Uruguay are held in the country, which proves the increasing wealth 
of Uruguay. And this is the more remarkable, as people in Uruguay 
tend more to invest their savings in the purchases of land and mort- 
gages than in securities. 

The Guaranty Debt, 4 per cent, whose circulation is $2,630,200 be- 
longs to-day to the State, as same was redeemed by the purchasing of 
the mortgage bank which had these securities as a part of its capital. 

The Unified Interior Debt, 4 per cent, which amounts to-day to 
$1,448,650, is held in London by a company to the extent of $1,100,000, 
the balance being in Uruguay. Noteworthy is the fact that the com- 
pany which holds these 4 per cent securities is anxious to keep them 
and does not avail itself of the privilege of having redeemed the 
amount subject to redemption by means of the sinking fund. 

The Insurance State Bank loan, $3,000,000, 5 per cent belongs to 
the State, as the bank never felt the necessity of selling bonds and 
has already substantial reserves. 

In 1910 the public debt of Uruguay was $136,214,000, increasing to 
$142,873,000 on December 31, 1914. But it is well to keep in mind 
that the increase at $6,559,000 is more apparent than real for the 
following reasons : 

(1) That the debt of the Insurance Bank is held by this institution 

and now amounts to $2,921,200 

The bank holding at the same time other securities to the amount of _ 100, 000 



3, 021, 200 

(2) That the debt of redemption of Government lands, amounting to 
$1,282,528, converted an old floating loan, which represented for 

the Government a higher value equal to 1, 282, 528 

(3) That the debt " certificados amortizables " is a loan made by 
the State to the holders of other securities, with relation action 

to profits of the Mortgage Bank, amounting to 1,151,170 

(4) That with the purchase of the mortgage bank the guaranty 

debt was reduced to the extent of 2, 630, 200 

(5) That the internal debt of the State electric-power enterprise, 
$4,500,000, issued in 1913, was exchanged with foreign debt to the 

extent of 3, 705, 188 

(6) That the Government holds " Vales del Tesoro " in a special 

fund 845,100 

(7) That a parliamentary commission holds with the same purpose- 487, 450 
(S) That the Public Charities, a Government institution, holds 

gifts and legacies to the amount of 6S3,000 

Total 13, 805, 836 



MEMORANDUM BY URUGUAY. 653 

The foregoing shows that although the public debt increased by 
$6,659,000 from 1910 to 1914 the State owns, one way or the other, 
$13,805,836 of the debt. Adding to this increase the $6,000,000 of 
internal debt to be issued, the total increase from 1910 to 1915 will 
be $12,659,000, while the values redeemed and acquired by the State 
amount to $13,805,836. 

GOVERNMENT PROPERTY. 

Against the public debt the State has acquired the following values 
from 1910 to 1914: 

The Banco de la Kepublica, whose capital on December 31, 1910, 
was $7,531,000, accumulated profits during the following four years 
to the amount of $5,219,000, which capitalized at 6 per cent repre- 
sent a value of $22,000,000,. and estimating the privileges of the bank, 
monopolized right of issuing bills, etc., at $8,000,000, the total assets 
of the bank may be estimated at $30,000,000. The State Insurance 
Bank, established in 1911, has been a remarkable success. Its profits 
in 1914 were $253,000, which capitalized at 6 per cent represent a 
value of $4,220,000. Added to its reserves and privileges (estimated 
at $5,780,000) the value of the assets of the bank may be considered 
to be $10,000,000. 

The Mortgage State Bank cost the State $5,000,000 in 1912, and 
with capitalized profits ($1,617,000) and privileges is worth 
$12,000,000. 

The electric power enterprise is a State monopoly. Its capital 
based on 6 per cent capitalized profits was $9,276,000 in 1910-11 and 
$15,580,000 in 1912-13, and as the State monopoly is worth at least 
$10,000,000, the total value of the enterprise may be put down at 
$25,800,000. Thus we come to the following conclusions relative to 
the increased and total value of these four Govermnent financial in- 
stitutions during the years 1910 to 1915 : 



Institutions. 



Banco de la Reptiblica. . 

Insurance bank 

Mortgage bank 

Electric ligbt and power . 



Increased 
value. 



$5,209,000 
4,220,000 
6,617,000 
6,304,000 



22,350,000 



Total 
value. 



$30,000,000 
10,000,000 
12,000,000 
25,580,000 



77,580,000 



There has been furthermore acquisitions and improvements rep- 
resenting the following values: 

Port of Montevideo $3,528,000 

Land purchase for agricultural stations 550,000 

Geological Institute - 100,000 

Buildings for legations, the police, and jails 1,052,000 



654 PAN AMERICAN FINANCIAL CONFERENCE. 

Bureau of fisheries $100, 000 

Legislative palace 111, 000 

Roads and bridges 3,898,000 

Parks and other properties 3, 292, 000 

Increased value of the Government institutions mentioned 22, 360, 000 



Total value . 34, 991, 000 

STATISTICS. 

Stock of cattle heads__ 8, 000, 000 

Stock of sheep do 25,000,000 

Stock of horses do 500, 000 

Stock of hogs do ISO, 000 

Appraises value of land $1, 200, 000, 000 

Wheat crop (average) tons_. 200,000 

Gorn crop do 200, 000 

Linseed crop do 27, 000 

Oat crop do 27, 000 

Wine crop do 34, 000 

Tobacco crop . do 1, 000 

Railway extension kilometers 2, 540 

Railway investments $90, 000, 000 

Railway gross earnings $7, 200, 000 

Railway guarantees 700, 000 

Passengers carried : 2, 000, 000 

Freight carried tons__ 1, 600, 000 

Live stock carried heads 1, 800, 000 

Cows slaughtered : 

1911 do 192,657 

1912 do 200, 794 

1913 do 13, 115 

1914 do___ -_ 9, 842 

Other cattle slaughtered : 

1911 do 382, 624 

1912 do 351,384 

1913 do 418, 204 

1914 do 423,384 

Sheep slaughtered : 

1911 do 296,891 

1912 do 333, 544 

1913 do 309, 152 

1914 do 116,869 

Value of slaughtered live stock $22, 002, 880 

Wool crop $25, 000, 000 

The staple products of Uruguay being meats, hides, and wool, 
at present in great demand by the belligerent countries and others, 
the prices for these commodities have attained extraordinary high 
levels, and are responsible for the large trade balances which Uru- 
guay is accumulating and whose beneficial powers will show their 
full action when peace has been signed. 



MEMORANDUM SUBMITTED BY THE DELEGATION 
OF VENEZUELA 



655 



MEMORANDUM SUBMITTED BY THE DELEGATION OF VENEZUELA. 



Mr. Chairman and Gentlemen : 

My first thought — in seeing congregated here representatives of all 
these nations — is dedicated to the memory of the initiator of Pan 
American congresses, the liberator, Simon Bolivar, founder of the 
independence of Bolivia, Peru, Ecuador, Colombia, and that of 
Venezuela, the last of which I have the honor to represent. 

Pardon me, gentlemen, if I make a short reference, born from a 
patriotic sentiment, regarding that subject, which digression I am 
sure you as honorable and worthy representatives of the republican 
entities of the world of Columbus will excuse. 

The liberator, Simon Bolivar, called the first Pan American Con- 
gress at Panama in 1824. It convened in 1826. For various reasons 
which need not be mentioned here, it did not meet with great success. 
The United States appointed two delegates after some debating in 
Congress. One of them died on the way to Panama and the other 
reached that city when the congress had already been adjourned. 
The apparent failure of the Panama Congress proved to be in later 
years the basic principle for initial success of other congresses. 

The eminent American statesman, Henry Clay, hailed Bolivar as 
the ""Washington of South America," and the brilliant Lafayette 
on a certain occasion did not fail to understand the true significance 
of that congress, with that inborn intuition with which supermen 
seem to be able to penetrate the future.* 

Years later, in 1881, the distinguished American statesman, Mr. 
James G. Blaine, then Secretary of State, called a Pan American con- 
ference which convened in 1889. Mr. Andrew Carnegie was one of 
the delegates of the United States, and to his philanthropic spirit 
and staunch support of Pan Americanism we owe, in a great measure, 
the great palace of the Pan American Union, which stands to-day by 
itself in commemoration of one of the most unique and active institu- 
tions of the world. 

To-day we find ourselves congregated for another Pan American 
conference, by virtue of an invitation through the honorable and 
talented Secretary of State, Mr. William Jennings Bryan. 

While Mr. Blaine belonged to one of the two great political parties 
of this country, Mr. Bryan has been identified with the other party, 

* See Appendix to this memorandum. 
98257°— 15 42 G57 



658 PAN AMERICAN FINANCIAL CONFERENCE. 

which clearly proves the fact that, no matter what the aspirations 
are in both political organizations, they are animated by the same 
spirit of Pan American solidarity. 

It is incumbent upon the honorable Secretary of the Treasury of 
the United States to direct the proceedings of this conference, the 
object of which is very specific in its various phases. No doubt its 
results will be far-reaching, indeed, for all the countries represented, 
as we shall profit immensely by the experience acquired through 
those who are considered to-day as the masters of finance of the 
world. 

It was shortly after the 1914-15 budget was put in force in Vene- 
zuela that the European war broke out. The suddenness of its ap- 
pearance caused a great shock to the well-balanced financial systems 
of the world, for it was equivalent to the partial destruction of an 
internationally woven netting in which all the parts bear a common 
relation to each other. 

Venezuela, being a country whose main source of revenue is 
derived from import duties, did not fail to recognize at once the 
transcendence of this unexpected event and immediately took the 
initiative to see that the normal course of the budget was not 
altered, notwithstanding the expectation — which proved true — of a 
considerable impairment in the revenues of the Eepublic, 

The Government of Venezuela decided that, to meet the situation 
squarely and with some degree of success, it was necessary to act 
with great caution. Instead of increasing duties and taxes to make 
up to some extent the expected decrease in revenues, it adopted a 
course involving less hardship for her people to be burdened with: 
It reduced the personnel in the Government offices and forthwith 
proceeded to also reduce the budget expenditures by 25 per cent. 
Although this decrease was enforced in August, the operation of the 
budget on the 75 per cent basis proved by actual reckoning that it 
was insufficient to meet the decrease in revenues. By November fol- 
lowing another retrenchment of expenditures on the same proportion 
was decreed. The results so far obtained, after 10 months of com- 
mercial disturbance in the world, have proved quite satisfactory to 
the Government, and Venezuela, in spite of all, has been able to 
accumulate a considerable surplus in her treasury, which also speaks 
very highly of the soundness of her monetary system. 

Previous to the outbreak of the European war conditions in gen- 
eral were quite flattering, manifestations of certain prosperity being 
shown throughout the country in the form of industrial develop- 
ment, especially in agricultural and mining pursuits. 

In facing the grave crisis of August, however, the Government 
of Venezuela did not have cause to be apprehended on her ability 



MEMORANDUM BY VENEZUELA. 659 

to come through with flying colors, for she relied mainly on her 
old stand-by — the gold standard — which had been so powerful an 
aid in times past, to rehabilitate her from effects of internecine dis- 
turbances. 

Venezuelans are proud of their monetary system, based on the 
gold standard, which they always have had, and it has been the aim 
of all administrations to see that it is not impaired in the least. 
In fact, this system is the object of special reference in the Venezue- 
lan constitution. No fluctuating paper money exists in Venezuela. 
The bolivar, our unit, is on equal rating of exchange with the 
franc and the lire. In some months of the year, when coffee 
and cocoa crops are being raised, said unit is sometimes at a 
premium, for it is during that period when gold is imported into 
Venezuela. Some find it more profitable to pay a premium in dis- 
counting Venezuelan drafts in that country than to ship gold which 
pays a certain primage for transportation, which percentage is some- 
times higher than the difference by the regular rate of exchange of 
the bolivar. Therefore, so far as the monetary standard of Vene- 
zuela is concerned, no relief is sought to alleviate inconveniences 
caused by a highly fluctuating monetary standard. 

Although most commercial establishments in Venezuela are carry- 
ing out regular banking transactions with their correspondents 
abroad, the burden of banking facilities of the country is carried by 
three principal banking institutions, as follows : Bank of Venezuela, 
Bank of Caracas, and Bank of Maracaibo. There are also three 
loan and saving banks of minor importance. 

The Bank of Venezuela has a capital of 12,000,000 bolivares. Its 
headquarters are at Caracas and it has agencies at La Guaira, 
Porto Cabello, Valencia, Maracaibo, Coro, San Cristobal, Barcelona, 
Cumana, Carupano, Porlamar, Juan Griego, Guiria, Maturin, and 
Ciudad Bolivar. It is the collector and disburser of Government 
funds throughout the country, excluding the Government treasury 
at Caracas, which takes care of the capital. The issue of its bank 
notes has never reached $400,000. 

The Bank of Maracaibo, with a capital of 1,250,000 bolivares, is 
more of a local institution. 

The Bank of Caracas has a capital of 6,000,000 bolivares and does 
a considerable business all over the country, having branches in the 
most important commercial centers. Here, again, we find that this 
bank has in circulation bank notes to the amount of about one-tenth 
of the issue allowed in its charter. 

The proposed Pan American bank, with branches in the principal 
cities of Latin America, in the opinion of many, would be of para- 
mount importance to shippers and manufacturers of all the American 



660 PAN AMERICAN FINANCIAL CONFERENCE. 

Republics for the clearance of a great bulk of their commercial 
transactions. It is a long-felt necessity, and its operations could be 
established, perhaps, with the active cooperation of the present bank- 
ing institutions. 

The history of Venezuela's public debt demonstrates that our loans 
have always been underwritten in Europe. Thinking that it may be 
of interest to the conference, I beg leave to make a short chrono- 
logical synopsis of Venezuelan loans and also a general statement of 
our public debt of Venezuela up to December, 1914, to wit: 

1820. Debt contracted while Ecuador and Venezuela formed part of greater 
Colombia. It amounted to £ 547,783, for wliicli debentures were issued. 

1822. Loan by Graham & Powels for £ 2,000,000. Issue at 80 per cent, 6 per cent 

interest per annum. A portion of this loan was used to cancel the 
debt of 1820. 

1823. Loan of $30,000,000. General revenue and tobacco revenue pledged as a 

guaranty. 

1824. Loan of £4,750,000 by B. A. Goldsmith & Co., of Hamburg. Issue at 85 

per cent. Interest rate of 6 per cent per annum. The total indebted- 
ness in this year was of £6,750,000. 
1831. Greater Colombia was divided into three distinct Republics, New Grenada, 

Ecuador, and Venezuela. 
1834. An apportionment was made in this year for the public debt, as follows : 
New Grenada, 50 per cent, or £3,312,975. 
Ecuador, 21.5 per cent, or £1,424,579. 
Venezuela, 28.5 per cent, or £1,888,396. 
1848. Conversion of active debt interest at the rate of 4 per cent per annum. 
1856. Venezuela received $1,140,000 in 4.5 per cent Peruvian bonds, as proportion 

of debt from Peru. 
1862. Loan issued at London for £1,000,000, at the rate of interest of 6 per cent 
per annum, 2 per cent sinking fund. Rate of issue, 63 per cent. 
Pledge was given of 55 per cent of import duties collected at La 
Guaira and Puerto Cabello. 
1864. General Credit & Finance Co., of London, took loan of £1,500,000, at 60 

per cent issue and 6 per cent interest. 
1872. Decree by which custom receipts were divided into 100 units, of which 

27 per cent was allotted for the service of the external debt. 
1883-1888. Steps taken without avail for the consolidation of the external 

debt. 
1889-1891. Public debt of Venezuela is divided into 4 classes: Domestic, dip- 
lomatic, foreign, and bonds. In 1891 the total debt of Venezuela was 
as follows: 

Domestic (5 per cent), consolidated $7,595,227 

Foreign (3 per cent), external 13,450,675 

Diplomatic (13 per cent) 1,000,000 

1 per cent monthly debt 647,499 

22, 693, 401 
Less than 14 per cent of revenues was pledged for the service of these 
obligations. 
1895. German loan of 50,000,000 bolivares by Diskonto-Gesellschaft, of Berlin, 
at 80 per cent issue. Bonds bearing 5 per cent interest and 1 per 
cent sinking fund. 



MEMORANDUM BY VENEZUELA. 661 

1902. Consolidation of various internal debts by issue of bonds for 65,000,000 

bolivares at 6 per cent. 
1902. Debt of allied powers, by virtue of protocols signed at Washington, 

totaling $7,147,386. 

The following data is taken from the annual report of the Secre- 
tary of the Treasury of Venezuela to the present Congress, dated 
April, 1915 : 

PUBLIC DEBT. 

Internal debt: 

I. National internal consol, 6 per cent — 

Bolivares. 
First issue __ 23, 927. 47 

Second issue 16, 772. 12 

Bolivares. 

40, 699. 59 

II. 1 per cent bonds, eighth issue 38,165.62 

III. National internal 3 per cent consol 59, 068, 721. 47 

IV. National internal consol, no interest 1, 135, 644. 83 

V. Treasury bonds to bearer 349, 102. 13 

Bolivares. 

. 60,632,333.64 

External debt: 

I. National 3 per cent diplomatic (by diplo- 
matic conventions ) 9, 723, 291. 61 

II. Provisional certificates (Spain) 1,600.00 

III. Diplomatic debt (3 per cent), conver- 
sion and issue of 1905 101, 267, 650. 00 

110, 992, 541. 61 

Or a total indebtedness of 171, 624, 375. 25 

This is equivalent to $33,000,000, which is a per capita of about $11. 

At the present time there are some public service companies which, 

although organized, have failed to carry out their plans, due to lack 

of capital. This is the time when American capital should take ad- 

, vantage of the great opportunity for industrial development in the 

Latin American countries. 

The needs of merchants and manufacturers can be remedied by 
a simple study of actual conditions of trade in Latin American 
countries. 

The last 15 years have witnessed an unusual activity on the part 
of Americans to enter the South American fields of commerce and 
industry. The main question in the minds of those interested in 
such a campaign has been : 

How can we control the South American markets, which have 
been for so long in the hands of European competitors \ What would 
be the best plan to adopt in order to succeed there ? 

To reply to those questions in their minutest details would simply 
add volumes to the volumes already written in that respect, involving, 
naturally, diversity of opinion in favor or against any special plan 
of action. It may be stated at the outset that there are many who 
believe that a forceful action, regardless of study of local or general 



662 PAN AMERICAN FINANCIAL CONFERENCE. 

conditions in South America, would simply result in ousting the 
Europeans from the position so long held by them, due to their 
understanding of the situation. To those seeking such immediate 
results nothing but a dismal failure will be their lot. 

In reasoning from cause to effect let us take as a separate unit 
some of the causes of the present superiority of the European mer- 
chant in the South American markets. 

Being natural neighbors in one hemisphere, it is reasonable to 
think that the bulk of South American commerce should be found 
between the United States and South America. It is not so, how- 
ever, for in the long study of the South American markets, to 
which Europeans have dedicated time and efforts, they seem to have 
found the formula they were looking for. They went to South 
America well prepared, knowing the language of the country, its 
customs, etc., even intermarrying with the natives in many cases. 
Their thorough knowledge of the people and their needs created, as 
it were, a new field in Europe for such needs. From personal ex- 
perience in my connection with a European firm for 20 years in 
Venezuela I may state that in the dry-goods business, for instance, 
the American merchant is outclassed. The European manufacturer 
will sell certain kinds of goods in, say, 10 or 15 color designs, just 
as the customer wants them, for a given number of yards. The 
goods when ready will be packed just as the buyer wants. It may 
need in many cases a special packing to withstand mule-back trans- 
portation throughout interior towns, where means of communication 
are far from being perfect or comfortable. In many cases competi- 
tion among Europeans themselves is so keen that merchants will 
forward samples of goods to their respective countries with details 
as to prices, conditions, probable sales, etc., with the result that in a 
few months a new article appears in the market which will compete « 
successfully. These simple illustrations give an idea of how the 
European strives and struggles to conquer those fields of commerce 
and industry, using all the means at his command to achieve his 
ambition. 

How different the United States merchant is ! His great country 
and its wonderful resources have developed so marvelously in the last 
few generations that he has been obliged to devote special attention 
to the domestic demand in all branches of business and less time 
than he should to exports. The development of the domestic business 
has reached such a high mark that the American business man has 
become almost the most independent mortal in existence, and to such 
an extent that the buyer either has to submit to his terms or go else- 
where for the goods he wants. In the dry goods example cited 
above, for instance, the American manufacturer will provide four 
or five different color designs instead of 10 or 15, which will mean 



MEMORANDUM BY VENEZUELA. 663 

for the purchaser that he shall have to buy more goods than he 
wants of a certain kind, while, on the other hand, that will give him 
a smaller stock for his customer to select from. Besides this, the 
American merchant will be reluctant to pack the goods as wanted 
and very often will oblige the buyer to repack at port of arrival so 
that goods may be delivered in the interior towns. Consequently, 
so far as that line is concerned, the European will outwit the Amer- 
ican. In other words, the latter will try to force the sale of his 
goods on the customer. In great many instances this will be done by 
inexperienced salesmen who do not know even the language spoken 
in the territory they are covering, being compelled to avail themselves 
of interpreters to carry out their work. The disadvantage of the 
American salesman is thus far clearly shown, and such a handicap is 
aggravated by the important hinging fact that the European will 
grant to the South American buyer from 4 to 10 months' leeway to 
make his credit good, while, on the other hand, the American 
merchant will sell his goods on a cash basis, whether f. o. b., f. a. s., 
or c. i. f., generally through a commission merchant in the United 
States. The commission merchant has to conform to domestic re- 
quirements in the handling of exports and as a general rule settle- 
ments are in order in 19 or 30 days. As a consequence the carrying 
capacity of the commission merchant is generally strained unless he 
is backed by powerful financial support or is heavily interested in the 
agricultural development of those countries and makes loans for the 
raising of crops and receives good consignments of South American 
staples. The day of the commission merchant is coming to a close, 
and his disappearance as a great factor in exports is not very far 
off. This is due to the fact that a good capital is needed to carry 
the business on the cash basis in the United States, and also to the 
advantage to be found in direct dealings with South American mer- 
chants. 

Another source where we may find a powerful reacting agent 
against South American development by American capital lies in the 
attitude of some units of the American press toward South American 
interests. In this connection, I may say, that there are certain news- 
papers which for some unknown reason seem to be animated by an 
unfriendly spirit and are prone to publish with regard to South 
America anything that may be set in type, whether opprobrious or 
inaccurate, false or unjust to those countries. Such newspapers will 
not take the trouble to investigate the truth through the means at 
their command. Their utter indifference to anything revealing prog- 
ress, industrial development, or other worthy activity, and their 
apparent pleasure to vilify those countries with sensational news of a 
militant character, has ruined on many occasions splendid prospects 
of industrial development in South America by American capital. 



664 PAN AMERICAN FINANCIAL CONFERENCE. 

Many ask: "How can we get at those markets on a permanent 
basis?" 

There are some who think that it can be done in the get-rich-quick 
spirit, but they are sadly mistaken. It is surprising to see the great 
many who since the European war commenced have applied to South 
American consulates for information regarding those countries. In 
the majority of instances the inquiries have been confined to the ask- 
ing of data concerning import duties on articles of their particular 
line and their probable or average amount of imports and sale prices 
of such commodities in South America having a European origin. 
Some also have the idea that consular officers act here altogether as 
purchasers for their countries. Some visitors generally leave their 
cards, with the request that "if inquiries for such products are 
made, kindly refer them to us." 

In order to illustrate business conditions in Venezuela and to give 
an idea of the hold that Europeans have on Venezuelan commerce, 
I will quote a few figures taken from Venezuelan Statistics of 1912, 
edition of 1914, and relating to the volume of trade between Vene- 
zuela and other countries. 

For the sake of brevity I will omit countries having a trade of 
less than 10,000,000 bolivares.* 

Imports, 1912, 106,000,000 bolivares; exports, 1912, 133,000,000 
bolivares. Total volume of trade, 239,000,000 bolivares distributed, 
with exceptions noted above, among the following countries : 

• Bolivares. 

United States 75, 600, 000 

France 53, 200, 000 

Germany 39, 000, 000 

England 37, 800, 000 

Spain 12, 400, 000 

Holland 12, 300, 000 

Although the United States leads with 75,000,000 bolivares, the 
European countries have a trade which is more than twice as large, 
being, in fact, 164,000,000 bolivares, with the added circumstance 
that the figures for the United States include their exportation of 
gold to Venezuela. In other words, the United States are only 
getting about 32 per cent of the Venezuelan trade. 

In the previous lines I have endeavored to give a synopsis of the 
causes of European success and, on the other hand, the effect of bad 
management of trade by Americans ; and, further, I hare shown that 
in the face of those handicaps the United States has in Venezuela 
individually more business than any one particular country in 
Europe, but less than half that of combined Europe. 

With such a splendid geographical position as Venezuela enjoys 
in South America it is really strange that the trade of the United 

* Bolivar=$0.193 gold. 



MEMORANDUM BY VENEZUELA. 665 

States and my country is not double what it is to-day. To increase 
that trade and to let it reach its normal development should be the 
aim of all Americans and Venezuelans. But the former will have to 
take notice and follow the steps of the Europeans. They will have 
to make a thorough study of South American markets. Such a study 
must be made by all means by men capable and duly seasoned for 
the task. Americans must make up their minds that the South 
American must be treated fairly. They must be ready to com- 
ply with local demands in certain lines of business; they must not 
try to impose conditions in a field where the buyer will find many 
competitors. If these conditions obtain throughout their dealings, 
and if, above all, the American merchant sees his way clear to give 
some credit to the South American merchant, as the European does, 
there is no question but what he will probably increase his business 
to a considerable extent. 

The question of credit is a very important factor to be considered 
in this matter. As our merchants need funds to facilitate the mov- 
ing of crops of coffee, cocoa, rubber, etc., in order to ship these 
products to foreign markets where they are handled and consumed, 
the importance of credit is most vital. Credit, however, can not be 
established if the American merchant does not know well the person 
with whom he is to negotiate or the conditions of the country where 
his money goes. Sometimes a severe drought makes it impossible for 
some merchants of the interior to ship their products, which are to be 
transported sometimes by river boats to the seaboard, while at other 
times, in the case of mule-back transportation, heavy rains make 
such muddy roads that it is an impossibility to have the goods taken 
to the port of shipment. 

Those inconveniences are unknown to the American merchant 
whose country is blessed with railroads, canals and rivers, and lake 
steamers. Therefore I must emphasize that the only way to be suc- 
cessful in getting the South American trade' lies in the practice and 
the learning through object lessons of what can not be learned by 
lectures or travelogues. The Government of the United States has 
given a very fine example of its good will toward this end, as shown 
by the results of the trip made through some of the South American 
countries by the special agent of the Department of Commerce, Mr. 
W. A. Graham Clark. He brought samples of manufactured articles 
used in those countries in order to show the American manufacturers 
how they have to conform to the wants and other requirements of 
those markets. 

Now it is up to the merchant and manufacturer of the United 
States to go and see for themselves everything related to their busi- 
ness, the conditions of the country, their people and tradesmen, in 
order to arrange their methods accordingly, tending toward the 



666 PAN AMERICAN" FINANCIAL CONFERENCE. 

establishment of sound and profitable connections. The personnel 
of this investigating corps should not be guided by a mercenary 
spirit, and all of their members should be business-trained gentle- 
men of sound judgment and pleasing personality. In my estimation 
enough opinions and theories have been expounded and now it re- 
mains only to go ahead and do it properly. 

The business associations of the United States are wealthy enough 
to be able to spend a few thousand dollars in a practical study, and 
secure the results similar to those already appearing in the report 
submitted by the competent agent sent by the Department of Com- 
merce of the United States. 

The extensive coast line and splendid ports of Venezuela have 
always been a great asset in Venezuela's commerce. 

Transportation facilities with the United States are available with 
the present operation of the following steamship lines : Eed D Line 
(American), Koyal Dutch & West India Mail Co., Trinidad Line, 
Scandella Line. There is also an irregular service of chartered 
steamers and sailing vessels employed by various American indus- 
trial enterprises in Venezuela for the outlet of their products, such 
as asphalt, magnesite, etc. German and British lines also take thou- 
sands of tourists to Venezuela during the cruising winter months. 

Although commerce with Venezuela has increased considerably, 
especially since January of the current year, and notwithstanding 
the well-known fact that the European war has placed a serious 
damper on shipping in general, I may state that it is due to the ex- 
istence of an American line of steamships — which in normal times 
takes about 80 per cent of the freight to Venezuela — that we have 
not suffered so many inconveniences in this particular as other 
countries have. 

While Venezuela has, on the average, about nine different mail de- 
partures from New York every month, which include the parcel- 
post service, no money-order service exists with the United States. 

Permit me to state, in conclusion, that my task in lending my 
modest effort to this important conference would be incomplete 
without a few paragraphs taken from the annual report of the min- 
ister of finance, Dr. Roman Cardenas, submitted to the Venezuelan 
Congress in April last, and which may fittingly apply in a general 
way to the various matters to be discussed by this conference. They 
will be found in the following appendix, together with an article 
published by an American traveler (Mr. L. Elwyn Elliot) in an 
American magazine of last month, in which he depicts in an un- 
biased manner the true conditions of Venezuela at the present time. 
Some figures are also given regarding Venezuelan trade and exports 
from New York to Venezuelan ports. 

Pedro Rafael Bincones. 



APPENDIX. 

I. Historical. 

The family of George Washington appointed General Lafayette to 
deliver to the liberator, Simon Bolivar, a medallion having a por- 
trait of Washington, also containing a lock of hair of the modern 
Cincinnatus, and ornamented with the following inscription: 

Auctoris libertatis Americans in Septentrione hanc imaginem dat filius ejus 
(Pater Patriae) adoptatus illi qui gloriam siniilem in Austro adeptus est. 

Or, 

This picture of the Author of Liberty in North America is presented by the 
Adopted Son (of the Father of his country) to Him who reached similar glory 
in South America. 

General Lafayette wrote to the liberator the following letter : 

Mr. President Liberator : My religious and filial affection to the memory of 
Gen. Washington could not have been better appreciated by his family. I have 
been charged to-day with a very honorable task. In recognizing the exact like- 
ness of the picture I feel happy to think that my paternal friend, in choosing 
among living men and even among those belonging to history, would have pre- 
ferred to present it to Gen. Bolivar. What more could I say to the great 
citizen who has been hailed by South America as her liberator and confirmed 
as such by the world, whose influence, being at par with his unselfishness, 
carries in his heart the love for liberty without reserve and that of his country 
in all its purity? However, the public testimonials of your benevolence and 
esteem enable me to extend to you my personal congratulations as a veteran 
of the common cause who is about to leave for another continent and who will 
follow with his wishes the glorious crowning of your task and that solemn 
assembly at Panama, where all the principles and all the interests of the inde- 
pendence of America shall be completed and consolidated. 

Please accept, Mr. President Liberator, the homage of my respectful ad- 
miration. 

Lafayette. 

Bolivar's reply to General Lafayette was as follows : 

General : I have had the honor to see for the first time the priceless auto- 
graph of that beneficent hand of the New World. I owe this honor to Col. 
Mercier, who delivered to me your esteemed letter. I have been apprised 
with inexplicable rejoicing that you have honored me with a most valuable 
treasury from Mount Vernon: Washington's portrait, some of his venerable 
remains, and one of the monuments of his glory presented to me through your 
medium, on behalf of the brothers of the great citizen, the first born of the 
New World. 

There are no words with which to express all the worth that this present and 
its glorious considerations have in my heart. Washington's family is honoring 

667 



668 PAN AMERICAN FINANCIAL CONFERENCE. 

me beyond my most imaginary expectations, because Washington, presented by 
Lafayette, is the crowning of all human recompenses. He was the noble pro- 
tector of social reforms and you the heroic citizen ; the athlete of liberty, who 
served America with one hand and the Old Continent with the other. Ah, 
what mortal could deserve the honors bestowed upon me by you and Mount 
Vernon ! 

My confusion is equal to the immensity of my gratitude which I offer to 
you, together with the respect and veneration that every man owes to the 
Nestor of Liberty. 

With the greatest consideration, I am, your respectful admirer, 

BOLfVAR. 

II. — Financial. 

From the annual report of the minister of finance, Dr. Roman 
Cardenas, submitted in April last to the present Venezuelan Con- 
gress, the following paragraphs are quoted as bearing some relation 
to certain questions to be discussed by the Pan-American Financial 
Conference, viz: 

The national budget of income and expenditures is the immediate prognosis 
of a fiscal year, for it is prepared shortly before it is enforced. For its basic 
foundation it has the data of the previous budget and the current information 
accumulated daily by the division of the treasury. When the project is con- 
cluded the fiscal year is not yet ended, and it is only three months later when 
the division of accounts may present the final statement of the treasury and 
the balances to be paid or collected for the next budget. 

When this provision, notwithstanding its continuity, is absolutely impossible 
to carry out, due to certain events, the remoteness of which could not enter 
into the calculations of the administration, the Government is obliged to solve 
the problem of a sudden increase of expenditures or a rapid and excessive 
decrease in revenues. 

Such has been the case we have seen in the practice with the budget covering 
the fiscal year of 1914-15. The budget established the probable revenues 
according to the previous year of 1913-14, which showed a diminution in 
revenues. The latter, however, were sufficient in the normal course of events 
to cover the expenditures specified in the budget. The fiscal process of the 
new budget had begun to take its course when the European war broke out. 

As it is well known, 75 per cent of the national revenues are constituted by 
customs receipts, and the latter, due to the sudden paralysis of our commerce 
with the European centers, was to suffer a considerable decrease, which would 
have completely destroyed the budget system, thus exposing the normal course 
of the administration to discomposure and misgivings. It was therefore very 
urgent to adopt measures to counteract this imminent disturbance of the 
treasury while a study was being made of the incoming revenues, thus allowing 
a detailed estimate to be made of the various elements involved in such a 
grave question. 

This was the spirit which animated the decree enacted on August 27, 1914, 
ordering a reduction of the personnel in the Government offices and a decrease 
by 25 per cent of Government salaries and other appropriations. But the rapid 
decrease of the customs revenues in the months of September and October fol- 
lowing, and the seriousness of the war — the duration of which could not be 



MEMORANDUM BY VENEZUELA. 669 

foreseen — demonstrated that the question had to be solved according to the 
needs of the moment and also bearing in mind the safeguard of the future. 
Therefore a formal revision of the budget was undertaken which included each 
and every one of its items. 

Three remedies were at hand before the Government, in facing such a crisis, 
which could maintain the normal course of the administration, so as not to 
impair the obligations of Venezuela's public credit: Immediate reduction of 
expenditures, increase of duties and taxes, and a loan issue. 

In our economic system all taxes are paid by the people. Customs duties, 
which in other countries is paid by the foreigner, who is obliged to struggle 
with national competition, is being paid here by the consumer with the addition 
of high transportation charges. He pays for it with staple products which 
must compete in foreign markets with an abundance of similar products of other 
countries. 

Therefore, to increase the customs duties, the only one to choose from — for the 
increase of internal revenues would have been insignificant — meant to triple the 
cost of commodities, already high enough on account of the scant production, 
due to the war, and would have caused the ruin of our trade, placing poverty 
at the door of all social classes. 

The issue of a foreign loan — as an internal loan would have taken some years 
to cover it — was not only impossible to undertake, as it would have been* an 
exception in our favor by countries needing funds for themselves, but it also 
would have been essentially objectionable, for it would have increased the 
obligations of the State, which have already weighed for so long upon the nation, 
thus retarding its progress and creating serious duties for those who are" in- 
trusted with the safeguard of national existence. 

The only action remaining, involving less consequential hardship, was the 
elimination of commissions and public charges and the reduction of personnel 
and salaries. 

It was a sacrifice for those more intimately in touch and conversant with 
the responsibility of the administration, who have common moral interests with 
the Government they serve and support in the service of public welfare. 

In accordance with the foregoing the budget of November 7, 1914, was 
decreed and immediately enforced. This measure has yielded the results to 
be obtained with any plan directed toward the well-being of the people, for 
Venezuela will be able not only to maintain its economical stability while 
the European war lasts but in the midst of the present international com- 
plications has been able to maintain also its credit, thus deserving the com- 
mendation of being an exception in the general crisis due to the punctuality 
with which it has met and shall continue to meet its obligations. 

******* 

Notwithstanding very many moral and pecuniary obstacles, the credit of 
Venezuela has reached such a high standard — due to the punctuality with 
which it has fulfilled its obligations with regard to the internal and external 
debt — that its obligations do not need to be indorsed but with the faith of its 
word. Consequently the Government of the Republic must persevere in its 
purpose of eliminating all acts calling for a pledge or guaranty. 



670 PAN AMERICAN FINANCIAL CONFERENCE. 

III. — General. 

Taken from the Pan American Magazine, April, 1915 (article by 
L. Elwyn Elliot). Be view of various South American countries. 

VENEZUELA. 

For the last four years Venezuela has been in the agreeable position of pos- 
sessing a substantial surplus of national revenue over expenditure, and as 
a part of this ready cash has been preserved in the country's exchequer no 
doubt it will assist in tiding over such financial disintegration as resulted 
from the European war outbreak. 

Since the year 1910 this surplus has varied, but there has always been an 
addition to the national fund ; in 1912 it amounted to nearly $2,500,000 gold. 

During the same period of prosperity the import and export lists also soared 
into unprecedented figures, indicative of a time of expansion of industries. In 
the year 1913 the total foreign trade amounted to nearly $50,000,000 in value, 
divided between exports worth about $30,000,000 and imports costing $20,- 
000,000; here again Venezuela is in the fortunate position for having con- 
sistently outbalanced her purchases by her sales. 

These sales are all agricultural, and the two main export items are cocoa 
and coffee. Last year, however, the coffee crop was both scant in quantity 
and less fine in quality, so that a drop in value is to be expected in this im- 
portant item. Cocoa may do well in realizing prices if Venezuela has been 
able to get her product to market in time to take advantage of European de- 
mand arising after August for army use. 

A feature of the last few years' development has been the growing im- 
portance of Ciudad Bolivar, placed upon the banks of the Orinoco River in 
such a position that it taps some of the deep forestal regions which could have 
no other outlet. With improved steamer connections this riverine port has 
been able recently to greatly increase its output of raw rubber, or rather 
balata, chicle chewing gum, aigrettes and heron plumes, and tonka beans. 

All of the feather exports have gone to Europe, since their sale has been 
prohibited in the United States, but the amount has not been lessened ; the trade 
has, however, been rendered a little nervous in the past months by the pro- 
jected passage of the plumage bill by the British Parliament, which would 
have the effect of excluding many of these feathers from the English market. 

The chief trade of Venezuela has been for some years with the United States, 
the northern Republic taking about $10,000,000 worth and selling to Venezuela 
about $6,000,000 worth of goods in the last year, for which complete figures 
are not available, 1913. 

Commerce with Great Britain amounts to about $5,500,000, three-fourths of 
this sum being sales of British goods to Venezuela. 

Railroad extension will probably be somewhat delayed by European affairs, 
and the completion of the Venezuelan Central Line may be among the suf- 
ferers. There are three other British lines in the Republic, with a total length 
of about 170 miles, representing a capital of about $14,000,000. 

Notable developments of the year 1914 were made in the Maracaibo Lake 
region, where at least three new sugar estates were operating with vigor and 
expecting to commence production during the present year. There was great 
activity in the importation of machinery in this fertile section of the country, 
where resources have been for a long time more or less concealed behind the 
narrow and inhospitable entrance to the so-called lake. 



MEMORANDUM BY VENEZUELA. 671 

On the same shores, on the northwest, a coal and oil company has also been 
exploring and operating, with excellent prospects. The writer is exceedingly 
sanguine about the future of this remarkable area. 

The fortunes of Puerto Cabello do not appear to have improved during the 
year. The port of La Guaira remains as ever the chief channel of commerce 
to the interior, dominated by the charming capital, Caracas, and there has been 
noticeable growth in the suburban water place, Macuto. 

In internal affairs Venezuela was in a state somewhat resembling suspense 
during, at any rate, the first six months. There were one or two abortive 
attempts at revolution, and the firm hand of Gen. Gomez, who resigned the 
Presidency early in the year in order to be eligible as a candidate for reelection, 
had to be exerted to prevent the contagion from spreading. 

The feeling of uncertainty tended to retard enterprise to a certain extent, 
and, in common with her neighbors, Venezuela will probably husband her re- 
sources during the present year. She has punctually met her monetary obliga- 
tions abroad; in addition to payments of the public interest, she has reduced 
the outstanding amount through the operation of a sinking fund. There has 
been some complaint from foreign creditors on the failure up to the end of the 
year to settle the arrears of the Puerto Cabello & Valencia Railway; but this 
is a matter which may have received due attention by the time of publication, 
and there is no doubt of the ability of the Republic to meet the obligation. 

Mining in Venezuela displayed some promising aspects during the year. The 
Yuruari district was again to the fore with important new discoveries of gold, 
and if full advantage is not taken of the mines located the reason will prob- 
ably lie with lack of transportation to the coast, either by road or rail. 

In the State of Miranda there is every hope for rapid development of copper 
mining, and, although the iron mines of Imataca were reported closed down at 
the end of the year, later information seems to predict the reopening of these 
works when brighter times come. 

IV. — Statistical. 

General trade of Venezuela during the fiscal year 1913-14. 

Bolivars. 

United States 76, 528, 734. 81 

France 49, 437, 207. 97 

Germany 34, 040, 207. 53 

Great Britain 31, 726, 634. 54 

Netherlands 13, 249, 277. 01 

Spain 9, 530, 641. 94 

Italy ^ 3, 736, 746. 35 

Colombia 2, 460, 425. 84 

Austria-Hungary 2, 266, 375. 50 

Belgium 1, 421, 293. 30 

Cuba 73, 146. 60 

Panama 20, 903. 00 

Denmark 8, 800. 00 

Ecuador 2, 850. 00 

Total trade 224, 503, 244. 39 



672 PAN AMERICAN FINANCIAL CONFERENCE. 

Exports from the port of New York to Venezuela. 
Years : Bolivars. 

1909 16, 122, 223 

1910 20, 083, 974 

1911 - 21, 349, 111 

1912 33, 033, 407 

1913 33, 326, 562 

1914 30, 388, 486 

The decrease of exports in 1914 as compared with the previous year was due 
to the apparent collapse of business during the months of August, September, 
and October following the outbreak of the European war. 

Business, however, has rapidly increased in volume, especially since January 
of the current year, and at this writing such an increase, which is estimated 
at from 20 to 25 per cent over that of last year, is plainly demonstrated by the 
fact that steamship companies doing business with Venezuela are at the present 
time taxed to their overload capacity in taking care of the American freight to 
Venezuelan ports. 

Pedro Rafael Rincones. 



MEMORANDUM SUBMITTED BY JOHN CLAUSEN, 

MANAGER FOREIGN DEPARTMENT, CROCKER 

NATIONAL BANK OF SAN FRANCISCO, AND 

SPECIAL REPRESENTATIVE OF .THE 

SAN FRANCISCO CHAMBER 

OF COMMERCE 



9S257"— 15 43 673 



MEMORANDUM SUBMITTED BY JOHN CLAUSEN, MANAGER FOR- 
EIGN DEPARTMENT, THE CROCKER NATIONAL BANK OF SAN 
FRANCISCO. 



In the interest of merchants and bankers of California I take the 
liberty of submitting for your kind consideration the following 
matters pertaining to trade relations with Central and South 
America, with such comments as seem pertinent thereto : 

STATEMENT AS TO THE OUTLOOK FOB, THE YEAR 1915 FROM A FOREIGN 
TRADE STANDPOINT AND WHAT EFFECT THE OPENING OF THE PANAMA 
CANAL AND THE EUROPEAN WAR HAVE HAD UPON THE SEA-BORNE 
COMMERCE OF THE PORT OF SAN FRANCISCO. 

EFFECT OF THE PANAMA CANAL. 

Taking the first four months of 1915, as compared with the same 
period of 1914, the canal has in a general way been of great value to 
the port of San Francisco, and detrimental in some. The value of 
shipments from San Francisco to the Atlantic coast for the period 
stated is as follows: 

Via Tehuantepec & Panama Railroad 1914 $4, 350, 711 

Via Panama Canal 1915 7, 914, 535 

Increase of 3, 563, 824 

or nearly double as a consequence of the opening of the Canal. 

This does not necessarily mean that the additional amount of 
tonnage moved, but it does represent a large increase and a very 
material saving in freight rates. 

The shipments by sea from San Francisco to Europe during the 
first four months of 1914 and 1915 increased $8,684,972, or 472 per 
cent, which would not have been possible had the canal not been in 
operation. On the other hand the shipments to Asia show a con- 
siderable decrease, caused by cotton being shipped direct from Gulf 
ports and shipments being made from the Atlantic which heretofore 
were transported to the Pacific coast and reshipped from San 
Francisco. 

The canal, by enabling the Atlantic coast to reach the west coast 
of South America without transfer, has also taken away considerable 
tonnage heretofore shipped from San Francisco. 

675 



676 PAN AMERICAN FINANCIAL CONFERENCE. 

EFFECT OF THE EUROPEAN WAR. 

The European war has, like the Panama Canal, benefited and 
injured this port. It has, as shown above, largely increased the 
commerce from this port in some lines, whereas in others materially 
reducing them. It has created a shortage of vessels and increased 
charter prices and rates so that the available ship tonnage from the 
Pacific coast is entirely inadequate to handle the commerce which 
could be secured. After the war is over all indications) point to a 
large influx of immigrants from Europe and an unprecedented ex- 
port to Europe and, naturally, ships will be more easily procured. 

EXPORTS FROM SAN FRANCISCO. 

For the first four months of 1915 and 1914 the exports of San 
Francisco were as follows: 

Total exports first four months of 1914 $18, 296, 803 

Total exports first four months of 1915 2S, 224, 121 

Increase of 9, 927, 318 

or over $107,955 increase per day. 
This was divided as follows : 

To Europe: 

First four months of 1914 1, 839, 398 

First four months of 1915 10, 524, 370 

Increase 8, 6S4, 972 

To Central America : 

First four months of 1914 851,429 

First four months of 1915 1,207,344 

Increase 355,915 

To South America : 

First four months of 1914 i 253 252 

First four months of 1915 549^ 373 

Decrease • 703,879 

To Australia and New Zealand : . 

First four months of 1914 1,708,853 

First four months of 1915 3,725,141 

Increase 2, 016. 28S 

To Asia : 

First four months of 1914 S, 423, 939 

First four months of 1915 7,542,058 

Decrease 881, 881 

To Philippines: 

First four months of 1914 2,012,154 

First four months of 1915 2,956,052 

Increase 943, 898 



MEMORANDUM BY JOHN CLAUSEN. 677 

From the foregoing it will be seen that our trade with Central 
America increased, principally because of the fact that the United 
States bought large quantities of their products and they therefore 
obtained American credit against which purchases were effected in 
this country. 

South America, on the other hand, shows a decrease both because 
of financial conditions and because of the lack of steamship service. 

Australia and New Zealand show increase and, with better steam- 
ship service, would show a still further gain. 

Asia shows a decrease caused almost entirely from the fact that 
the exports of cotton to Japan were very much less this year and 
because a large proportion of that which was shipped went direct 
from Gulf ports. 

The Philippines show a large increase and this would have been 
still larger had there been better steamship facilities. 

Taking the above facts and figures as a basis it would appear that 
the year 1915, from a foreign trade standpoint, should be unpre- 
cedented in the history of this State. 

STEAMSHIP SERVICE. 

It is reported that owing to the " seaman's bill " the Pacific Mail 
Steamship Co. will have to discontinue its oriental service, leaving 
absolutely no steamship connection between San Francisco and the 
Orient except the Japanese Line — the Toyo Kisen Kaisha, which 
line will naturally increase its rates, thereby depriving California of 
an opportunity to participate in the commerce with the Orient. 

Owing to the heavy fixed charges of the Pacific Mail Steamship 
Co., when their oriental service is discontinued it will be impossible 
for them to continue their Central American line, in view of the fact 
that present laws prohibit their operating through the canal. It 
therefore leaves California destitute of service to Central America, 
the east coast of South America, and European ports, with the ex- 
ception of Great Britain. 

UNIFORM CONSULAR INVOICES. 

At the present time each Latin American country has a separate 
and distinct consular invoice. If a uniform consular invoice could 
be adopted which would embody the requirements of each Eepublic, 
but which could be utilized for all, it would be of material assistance 
to our exporters, and if the Central and South American delegates 
would consent to the adoption of such a form, the San Francisco 
Chamber of Commerce would gladly prepare the proposed blank for 
their joint approval to be ratified by their respective Governments. 



678 PAN AMERICAN FINANCIAL CONFERENCE. 

LATIN AMERICAN IMPORT DUTIES. 

Another subject which the San Francisco- Chamber of Commerce 
desires taken up for reconsideration is that of import duties, in the 
hope of securing a lower rate than that now in effect. 

Efforts to introduce our products into Latin American countries 
have continued for many years, but we find no material development, 
owing to the high cost to the ultimate consumer. This high cost arises 
largely from the excessive import duties ancl customhouse charges. 
In Argentina these charges approximate three times the f. o. b. 
value of the goods, and more than twice the c. i. f . value, so far as 
most of the canned foods varieties are concerned. Conditions in 
Brazil are even more onerous. Canned tomatoes of the standard 2J- 
lbs.-size which retail in this country for 8 to 10 cents per tin retail for 
approximately $1 United States gold in Eio de Janeiro. Canned 
asparagus retails in this country at 20 to 25 cents per tin, and retails 
in Eio de Janeiro at $1.33 United States gold. These figures may 
be verified by the very extensive investigations which have been con- 
ducted by the Department of Commerce and by the figures published 
in the department's report. The Department of State has made every 
effort to secure more friendly action in these countries through diplo- 
matic correspondence, but we are forced to the conclusion that noth- 
ing can be accomplished along these lines. 

While it is true that these Eepublics are importing more canned 
foods from European countries than from the United States, the 
fact remains that the total imports are very small as compared with 
the population. At the present time the revenues derived are not 
so large as they would be if more favorable tariffs were assessed. 
The total importation would increase to such an extent as to augment 
their revenues, even with the lower tariff that would be adequate for 
any theory of protection for home industries, actual or prospective. 
Our correspondents in the Latin American countries advise that 
there is considerable complaint on account of the high cost of living, 
and we would respectfully submit that if they would reduce their 
tariffs to a reasonable level these Governments would not only in- 
crease their revenues, but would give the masses of the people a 
cheap, attractive, convenient, nutritious and wholesome article of 
food, tending to reduce their present high cost of living. 

In view of the fact that we are admitting the important articles of ex- 
port from these countries free of duties, it is hoped that some reciprocal 
action will be promoted on the part of the Latin American countries. 

TRADE DEVELOPMENT WITH CENTRAL AND SOUTH AMERICA. 

The most serious problems which at present confront us in pro- 
moting our trade with Latin America are : 

First. The absence of adequate banking and shipping facilities, 
organized to advance American interests. 



MEMORANDUM BY JOHN CLAUSEN. 679 

Second. The absence of adaption on the part of our manufacturers 
and merchants, and last, but not least, the lack of trained commercial 
men to do the necessary missionary work. The universal clamor of 
our merchants for banking facilities in foreign countries, more par- 
ticularly in Central and South America, is well founded, and banks 
throughout the country should take early heed to establish suitable 
connections in order to adequately care for the requirements of their 
clients. 

If we wish to conquer foreign markets, we must necessarily meet 
their needs, and it can not be too strongly emphasized that unless our 
commercial houses approach intended customers in terms with which 
they are familiar time and energy will be wasted and result only in 
misdirected and fruitless efforts. 

The best man in a business concern is the only right one to influ- 
ence trade opportunities, such as have been suddenly offered to us 
by the misfortune of the great industrial nations of the world, and 
if our business leaders wish reciprocal trade, they must not send rep- 
resentatives with only slight knowledge of ethics in business, but 
rather men of the broadest experience, able to cope with the problems 
presented. Success in any one line or for any one man means pros- 
perity for several others, and it is therefore not so essential that 
every merchant or manufacturer here should engage in the foreign 
trade, as long as those who do not are willing to afford their moral 
support in a move that ultimately will redound to the benefit of all. 

In this country the economic effects of the European war have 
probably reached their most serious aspects, and business is again 
settling down into almost normal lines. We are just beginning to 
recognize the possibilities offered for expansion of trade with foreign 
countries, and while the Panama Canal has opened for us a great new 
trade route — which we are prone to believe will ultimately place our 
country in a position to command the greater share of the Latin- 
American trade — we must not be illusionized, as unless we are able 
to adequately finance our contemplated negotiations a good part of 
the capital invested for the construction of the great canal will be 
wasted and our competing neighbors in Europe will reap the benefits 
of our undertaking. 

It is a recognized fact that the American merchant has been at a 
disadvantage in regard to shipping facilities, and this has proven a 
great handicap in building and picking up the trade which is now 
being neglected by Europe. To afford means of adequate transporta- 
tion we need ships — an American merchant marine — upon which 
profitable and useful commerce so much depends. 

The dislocation of financial and shipping facilities — with the con- 
sequent falling off in the European demand for the most valuable 
exports from the Latin-American countries — has resulted in an 



680 PAN AMERICAN FINANCIAL CONFERENCE. 

almost complete cessation of shipments to markets that formerly ab- 
sorbed the major part of their production, which loss and restriction 
of outlets has tended to seriously curtail their purchasing power as 
well. 

At present it may be said that there is a ready market in South 
America for practically all classes of goods, especially manufactured 
articles, and the commercial intelligence of merchants and manufac- 
turers in the United States should be alive to the opportunities as 
compared with European nations, who, owing to the uncertainties 
of the war and its duration, are temporarily inactive in trade which 
does not administer directly to war. 

These are conditions which are not likely to alter in a very mate- 
rial measure, unless our financial machinery is prepared to extend 
its operations by investing freely in their industrial enterprises as 
well as in their Government loans. 

Success lies in concentration — nothing can be accomplished in 
haste — which is particularly true in dealing with countries beyond 
our own borders, and while we hear frequent complaints of the serious 
obstruction to trade caused by the existing moratoria and other 
governmental measures, resulting in the restriction of credits and 
consequent curtailment of working capital, there is no real reason 
why, even at the present time, the same financial credit arrangements 
which Europe heretofore has afforded our sister Kepublics can not be 
established with equal satisfaction in their dealings with merchants 
here. In our business relations with South America and until only 
a few months ago we were obliged to consider the pound sterling, 
French franc, or German mark as the basis of our operations, and 
the United States dollar as an exchange medium has virtually been 
an unknown quantity to the merchant and our financial contem- 
poraries in the Southern Hemisphere. 

When we now consider that the gold par value of the three prin- 
cipal exchanges is quoted respectively as $4.86,656 for pound sterling, 
5.18,26 for franc, 0.95,2852 for reichmark, and that during the last 
few months our merchants have been called upon to effect liquidation 
at $5 to $6 for the pound sterling, 20 cents (5.00) for the French 
franc, and 24.50 (0.98) for the German mark, with a -problem be- 
fore us of an equally unjustified decline in these exchanges, when 
banks at present are selling the pound sterling at $4.78J, francs at 
5.40, and reichmarks at 82 J, it would prove of singular concern to 
the commercial interests and not a difficult matter to convince our 
southern neighbors that the time is opportune for making the United 
States dollar the basis of future transactions, and it should be the 
earnest endeavor of every merchant and bank in our country to give 
the American dollar the place it deserves in our international trade. 



MEMOEJINDUM SUBMITTED BY THE URUGUAYAN DELEGATION 
AS A SUPPLEMENT TO ITS GROUP CONFERENCE REPORT.* 



MARITIME TRANSPORTATION. 

Resolved, That the Conference declare the advisability of assisting the 
merchant marine of all American countries plying between ports of the hemi- 
sphere, giving the same franchises in order to place it on equal footing with 
the coasting- trade shipping. 

(1) The registering of ships shall not imply heavy expenses and 
the boats may be acquired anywhere in the world at the best market 
price. 

(2) No conditions shall be imposed on the crews, materials, and 
technical administration of the ships which will raise the price of 
keeping and running the vessels, paying due regard, however, to the 
sanitary requirements and safety of crews and passengers. 

(3) Vessels flying American flags between the principal ports of 
North and South America to pay no lighthouse fees. Port duties 
to be reduced, if possible. The Conference shall suggest to local 
Governments the advisability of granting those franchises in ports 
administered by them. 

(4) Vessels plying between ports of both Americas shall enjoy 
up to 1925 the freedom of registry and a reduction in consular fees 
for a term of five years. They shall pay no duties or fees for the- 
shipping and clearance documents during these periods of five 
years. 

Non- American ships shall enjoy these franchises for the term of 
five years if registered under the flag of one of the American coun- 
tries. These franchises to be lost by ships applying discriminating 
freight rates to the prejudice of other companies plying on the same 
routes. Foreign companies guilty of the above-mentioned discrimi- 
nation to pay double the amount of fees and duties during five 
years. 

The foregoing is based on practical experience. President Wilson 
has stated that maritime transportation will be in a precarious con- 
dition until sufficient ships ply between the ports of the American 
hemisphere. They should depart and arrive at fixed dates and offer 
every conceivable facility for transportation. New shipping enter - 

* This supplement contains the suggestions of the Uruguayan delegation with reference 
to the resolutions which in their opinion should be considered by the Conference as a 
whole (see p. 266). 

681 



682 PAN AMERICAN FINANCIAL CONFEEENCE. 

prises should be organized, which should not expect large profits at 
the beginning, but trust to the future for substantial returns, based 
on Government assistance and franchises accorded. Capital for 
shipping enterprises should be encouraged by every conceivable 
means. 

The conclusions of investigations made in the United States are 
responsible for the advisability of reducing the cost of registering 
as much as possible and for having demonstrated the high cost of 
registering, equipment, and running of vessels under the present 
maritime regulations of the 'United States. 

It is true that all countries trying to develop their merchant 
marine have also kept in mind the interests of their national navy 
yards, feeding thus an industry which in turn eliminates many 
others; but if in these matters conflicting interests be considered, 
those connected directly or indirectly with abundant and cheap trans- 
portation should prevail over any others. 

The reduction or the abolition of port dues will be an inducement 
to capital venturing into the shipping business and will diminish the 
speculative nature of the enterprise. The influence of good and cheap 
transportation in the development of foreign trade is obvious. Great 
Britain gave the world the most striking example of what could be 
done in this direction. France only succeeded in the expansion of 
her international trade by means of large subsidies and other fran- 
chises to her merchant marines. Germany became a feared competi- 
tor to the latter countries in the conquest of the markets of the world 
when she had secured for herself the means of transporting her prod- 
ucts in her own merchant vessels. 

A line of steamers supplying specific traffic is a transportation 
route capable of creating commerce if it does not exist, or increasing 
it if it is already established; just as navigable rivers and natural 
ports have created large cities. As railways bring about the estab- 
lishment of important cities along their routes, so a transportation 
route creates trade. 

In order to bind more closely the commercial relations between 
the countries of America, in order to do something really practical 
for the purpose of increasing the commerce of this hemisphere it is 
necessary that the first measure adopted for such purpose be the 
fostering of navigation, for navigation is the basic factor in the 
economic, rapid, and easy interchange of products. 

Among the various forms that there are, to give encouragement to 
merchant marine, is that of guaranteeing a minimum interest to the 
capital that may be invested in such enterprise or to give annual 
bounties or subsidies to the companies establishing navigation lines, 
for a period of time more or less extensive. If we have adopted a 



URUGUAYAN SUPPLEMENT. 683 

system not as favorable, of merety reducing or saving the expenses of 
lighthouse and port dues and of consular invoices, it is because there 
is also a danger in bounties and guarantee of interest. This danger 
consists in the fact that the company guaranteed against the losses 
sustained by lack of freight does not make any effort to work as it 
should, since it is sure to make the same gains without any sacrifice. 
A simple assistance which may merely consist in the reduction of ex- 
penses places such a company in a position to make every effort to 
obtain profits, to get freight, and to carry cargo, which is the real 
and fundamental object. 

WEIGHTS AND MEASURES. 

"Weights and measures in the American countries should be uni- 
form. The metrical system should be adopted and until this has 
been done prices, invoices, and bills of lading should be compiled in 
metrical units. 

In principle everybody has -adopted as the most logical the metri- 
cal system for weights and measures; but habits and custom are 
responsible for the persistence of old measures in some countries. 
In Great Britain traders have been for some time past mentioning 
in meters the equivalent of yards contained on each piece of goods. 
The Germans reduce all their operations to the metrical system in 
those countries where this is used. 

In the United States trade is still carried on by old methods. The 
pound, the gallon, the foot, as well are used. One gallon of wine 
and one gallon of oil are two different measures. In order to pre- 
vent confusion and mistakes that sometimes occur, the vendor should 
always give the prices in kilos, liters, or meters, even if the packing 
does not answer to those unities. 

This proposition is in harmony with that of establishing monetary 
unity throughout the American hemisphere. 

Hobatsck, the eminent economist, says that the internationaliza- 
tion of the metrical system is seriously opposed in Great Britain 
and the United States; but the English admit that this opposition 
harms their exports and favors that of other countries. This is the 
reason why the equivalents in foreign measures and weights is men- 
tioned in British export documents. As in all matters which affect 
large interests, it is difficult to change radically and suddenly 
methods which have been for a long time in practice. It is there- 
fore suggested that a transitory form be adopted which shall be the 
beginning of an evolution. Trade will continue its transactions 
with old measures if circumstances do not permit of the change ; but 
there is no reason for not mentioning always the equivalents in 
metrical units in prices and bills of lading. 



684 PAN AMERICAN FINANCIAL CONFERENCE. 

COMMUNICATION BY CABLE. 

The Conference declares that the rates for cable messages between 
the American countries should be decreased. 

This proposition is connected with that relative to the postage 
rates and has in view the same purpose. 

The rates for cablegrams are high, chiefly between North and 
South America. This service should be cheapened because the use 
of the cables for commerce is essential in order to make inquiries 
relative to general transactions, prices, orders of shipment, etc. 

Cable rates between New York and Montevideo are more expen- 
sive than those between Montevideo and London or Paris. 

When the rates for cable messages exceeds certain limits they be- 
come prohibitive, and then the cables are used only in case of great 
necessity, but not in ordinary transactions. 

It is true that by means of codes and ciphers merchants are able to 
reduce somewhat this handicap, and the cable companies rely on this 
fact in order to have the interested parties lessen a great deal of work 
for them by the use of synthetical and conventional forms. Not- 
withstanding this, high cable rates have a restrictive influence on 
free use, and, furthermore, not every merchant is familiar with the 
use of codes and ciphers. An inquiry relative to prices and specifica- 
tions to half a dozen firms represents sometimes a heavy expense, 
which not infrequently the smallness of the transaction itself pre- 
vents. This is particularly true of small orders, which in the aggre- 
gate constitute the bulk of commercial intercourse. 

The goal that trade wishes to attain is to gain time, for time is 
money. So that if there are two ways of communicating from one 
portion of America to another and if the former does it in twenty- 
four hours and the latter in twenty-four days (New York to Rio de 
la Plata), trade will always make use of the first; that is to say, the 
cable. 

MONETARY UNIT ; EXCHANGE AND ARBITRATION. 

Resolved, That the Conference in regard to exchange and the arbitration 
among American countries of everything relating to prices of merchandise, and 
for statistical calculations, advises the adoption as a monetary unit of a 
special coinage equivalent to some exact proportionate value of the monetary 
unit of each and every American country. 

The projects brought about in various times and in different coun- 
tries for the establishment of an international coinage have encoun- 
tered the difficulties of reconciling the interests of all the nations of 
the world. Only partial results have been obtained, for instance that 
of the Latin Union, that of the Scandinavian countries, and that of 
the Germanic States in 1838. 



UKUGUAYAN SUPPLEMENT. 685 

In 1902 a Xorth American, Charles H. Swan, gave a lecture be- 
fore the Statistical Society of Manchester on "An international gold 
coinage." He proposed to coin gold money of 10 grams with a fineness 
of 0.915 per thousand, and which would be worth 25 shillings, or 30 
francs, or 30 crowns, or 6 dollars, or 12 rubles. As can be seen, the 
first thought of Swan was that of conciliating the new money with 
the existent types in several countries ; and here his first obstacle was 
also the impossibility of a general solution on this basis. 

But it has been proven that for a determined region the adoption 
of international money is practical. 

That international money is necessary for America is shown by 
the fact that usually in operations oi exchange the English unit is 
used. The exchanges of Urugua}^ with Brazil are regulated by pence. 
As a rule for the other American countries money of Brazil is con- 
sidered by so many pence, determined daily in the exchange quota- 
tions against London for each 1,000 reis. In Chile, on account of 
there having been established an equivalency between the gold dollar 
and the English monetary unit ($1=18 pence), it happens that 
Chilean exchange suffers by repercussion the effects of an unfavor- 
able exchange toward England in the United States. As a matter 
of fact, it has been seen that when pounds are on the decline in 
Xorth American markets the Chilean dollars are at a low ebb, the 
reason being that their official value is 18 pence. Peru, by observing 
that its exchange, as in other near-by countries, always tended to 
be regulated by English money, has established the Peruvian pound, 
worth the exact equivalent of the English pound, and rectified the 
value of the " soles " in order that a pound should have 10 : therefore 
one " sol " is worth 2 shillings. 

To this complication resulting from the diversity of money is 
added the paper-currency question, a thing of oscillating value, 
which sometimes contributes to give an arbitrary value to foreign 
money. Recently we have seen in the Province of Mendoza, Argen- 
tine Republic, that in English commercial enterprises pounds ster- 
ling were only received at a value of $11 in paper currency, notwith- 
standing that their true equivalent was $11.45 ; and even the simple 
treasury certificates of the Province — that circulate like money — 
were worth on an average $11 paper currency for each pound ster- 
ling. 

It is in truth a problem to regulate exchange between American 
countries somewhat distant and with little commercial intercourse, 
as, for instance, between Chile and Colombia, between Argentina 
and Venezuela, between Uruguay and Peru or Ecuador. It is gen- 
erally necessary to make the transaction through London or Paris. 
The first difficulty is the money for these operations, the national 



686 PAN AMEKICAN FINANCIAL CONFERENCE. 

currency of each American country. Owing to the great commerce 
with Europe all American nations are familiar with pence or francs, 
and one or the other of these units tends to be the international 
American money. 

The International Conference on Commercial Statistics, which 
took place in Brussels during the month of November, 1913, re- 
solved to establish a uniform classification, to be adopted by all the 
signatory nations without forbidding that each could continue to 
maintain for its internal use the form of statistics it would deem 
most convenient. The uniform classification is used with the object 
of enabling one to secure and understand clearly the tables of foreign 
commerce of each and every country. 

As a consequence of the convention signed there, it has been planned 
to fix values in francs, and weights and measures in the metric sys- 
tem ; but no official statement has' been made. 

Why should not an American coin be adopted in America to 
supply all international requirements? 

From the start we may say that the values of commercial units, 
made according to the classification of the Brussels congress, would 
be fixed in that international American money; the exchanges of 
the countries of America would refer to that money in dollars; the 
prices given or asked for merchandise would be calculated in that 
same money and in metrical weights and measures. 

In all the American exchanges quotations would daily be made 
in the same money or with reference to it. 

By what has been said it will be seen that we do not propose a 
formula which, on account of its being considered Utopian, has been 
rejected or postponed more than once — the giving up of our respec- 
tive internal systems of money to be substituted by a new money, to 
be the same in all countries. This would be absurd, because each 
State has serious and complicated economic and financial problems 
which are closely bound to its monetary system. 

We accept these arguments as they stand and we know they can 
not be substituted by theories or doctrinaire arguments. We merely 
wish that such money should have the privilege of being utilized in 
the international transactions of the American countries. 

The opposition to the "universal money" theory is based on in- 
numerable arguments ; nevertheless the economic benefits that this in- 
ternational American money would bring are great and positive. 
Especially is this the case on the opening of a new era of commercial 
relations in this hemisphere, as hoped for by the eminent statesmen, 
originators of the First Conference of American Financiers, and also 
according to the optimistic expectations of all the countries of the 
New World. 



URUGUAYAN SUPPLEMENT. 687 

Mone} 7 may be considered the language of business. Since an inter- 
national language can not be established, because it is the more diffi- 
cult task, at least we could try to establish a money unit which would 
be common to the American countries. 

We may add in favor of this proposition that the excessive prestige 
of certain European money often casts a shadow on the merit of 
American gold. Notwithstanding the fact that the intrinsic value of 
gold money is superior to its face value, there is an evident influence 
of the economic law of competition in the general preference that 
the South American banks have for pounds sterling, and in the 
second place for francs, and their little interest in the gold coins of 
Brazil, Argentina, Chile, etc. Although it might be considered as a 
psychological effect of suggestion, it is a proven fact; and world 
prestige in the operations of international exchange can be considered 
as a phenomenon logically derived from the use of that money. For 
neutralizing this the money adopted as American international cur- 
rency will bring back prestige to the gold coinage of the American 
countries. 

The manner of carrying it out would be intrusted to the Pan 
American Union, and taking into consideration what has already 
been decided on the subject by the international Pan American con- 
ferences the governing board of the American Eepublics might be 
urgently asked to take whatever measures that it may deem to be the 
most rapid and efficacious for the immediate adoption of the mone- 
tary unit of coinage. 

FINANCES. 

Resolved, That the Conference declares that the countries of the American 
Republics should facilitate the action of their representative hanks in the dis- 
count of bills, the movement of capital, the fostering of trade, the financial 
support of public works, and the development of the wealth of the American 
continent. 

In former congresses the idea of the creation of a large Pan 
American bank, the capital of which should be supplied by all coun- 
tries of America, was discussed. Perhaps this artificial and isolated 
creation would have no reason to exist, or at least would not be a 
practical thing just now. More logical and easier would be the 
organization of international banking based on direct contact or by 
means of agencies or branches of the large institutions of credit hav- 
ing the privilege of issuing bills, which institutions already exist or 
should be established as soon as possible with the view to regulating 
credit, discounting commercial paper, and helping the circulation of 
domestic currency and foreign exchange. 

The Bank of France, the Bank of England, the German Imperial 
Bank, all these are examples of such privileged institutions. They 



688 PAN AMEBICAN FINANCIAL CONFERENCE. 

regulate credit in times of peace and protect monetary integrity and 
national resources in the difficulties of commercial crises or war. 

These banks that have existed for centuries (with exception of 
the German Imperial Bank, a relatively recent creation, although it 
originated in the Bank of Prussia, which was founded in 1785) 
really represent the nations whose names they bear, not only by 
their central power of credit and the concentration of operations 
they carry on, but also by their extension throughout the whole coun- 
try, so that they absolutely dominate the banking movement and give 
it power and direction. 

Up to the 23d of December, 1913, when the Federal Reserve Act 
was signed — the great reform of the Wilson Administration — the 
United States (with its thirty thousand banks and banking institu- 
tions and their $17,000,000,000 in deposits, an enormous amount com- 
pared with the deposit of the European banks) was not prepared to 
make a substantial effort for commercial expansion abroad, for the 
country lacked that unity of action which is as necessary for success 
in the economic field as it is in military matters. 

Fortunately the Federal Reserve Board under the direction of the 
Secretary of the Treasury, at present Mr. McAdoo, is making effective 
this aspiration of unity which extends throughout the whole country 
by means of its twelve Federal reserve banks, which in turn have their 
ramifications in other banks established in less important centers. 

The discount and the rediscount of commercial paper (national 
and foreign) is a means of issuing bills which have a gold guaranty 
of a determined percentage. This constitutes the basis of the new 
system, which permits, with the greatest elasticity, the expansion of 
the foreign trade of America, a project which before the establish- 
ment of the new regime was almost impossible of attainment. 

Uruguay is specially prepared to answer immediately to the new 
banking organization of the United States. Ten years ago there 
was established a large State bank, wherein politics has not played 
a role as it was thought would occur when established. This bank 
has continued to exist, and will continue to expand in a surprising 
manner, entirely independent of politics, although it is really a 
State institution similar to those of Sweden and Russia, its capital 
having been contributed solely by the Government and administered 
by directors appointed by the Executive power with the consent of 
the Senate. 

There has been built up in Uruguay a tradition which regulates 
the administration of the bank, and which no official, whatever his 
prominence and power, could do away with. This consists in giving 
to its directors, who are men totally disconnected with political con- 
troversies, the most absolute power in the administration of the 
institution. The employees are selected among the most able men, 



URUGUAYAN SUPPLEMENT. 689 

after having passed certain examinations, and the principal officials 
of the country, including the First Magistrate himself, take pride in 
not interfering with the independence of the bank, and they do their 
utmost to help increase its resources and credit. 

This bank, which to-day exercises a vital influence in the economy 
of the country by stimulating industries and trade, has twenty-four 
branches and agencies distributed among the principal cities and 
towns of the interior, and consequently can claim from an inter- 
national point of view the financial representation of the Republic. 
In the near future the bank will be in a position to extend its field 
of operations to North, Central, and South America, establishing 
there also agencies and branches, for its capital is rapidly increasing 
by means of accumulated profits. 

It is obvious that, as the aims and resources of the system im- 
planted by the Federal Reserve Board of the United States are 
entirety different, there would be immediate and positive advantage 
in the establishment of agencies and branches in the other countries 
of America to give available information to commerce and industry 
and to be efficient factors in trade interchange. 

European commerce has attained its well-known success in Latin 
America chiefly through the assistance of English, German, French, 
Italian, and Spanish banks profusely disseminated throughout those 
countries. 

Thus, banks starting in business with small capital have the enor- 
mous advantage of being able to use for their own benefit the money 
which is deposited in their vaults by their countrymen and profit 
by the rates of exchange which are immediately offered them with 
reference to the countries that they represent. Not only do these 
banks do business in the capitals of the Latin American countries, 
paying good dividends to their shareholders, but they also establish 
branches in the Provinces and districts where they do good business. 

If the United States wishes, it it seems that it does, while exer- 
cising its rights and just aspirations, to compete with European 
commerce in the South American markets, it must send as fore- 
runners banking institutions having the excellent internal organiza- 
tion of the Federal Reserve system. 

COMMERCIAL CREDIT. 

Resolved, That the Conference declares that there is positive advantage in 
expanding commercial credit throughout the American countries, establishing 
long-term credits in commercial transactions. 

One of the great handicaps for the expansion of trade in both 
Americas has been the system of restricted credits under which trade 

98257°— 15 44 



690 PAN AMERICAN FINANCIAL CONFERENCE. 

has been carried on. In marked contrast with the liberal credits 
accorded by most European firms the American concerns have main- 
tained a very reserved attitude toward Latin American merchants, 
which these have resented, naturally construing it as questioning their 
reputation. " Goods against cash " has been their policy. This policy 
may be explained to a certain extent by the lack of knowledge of con- 
ditions and customs of the Latin American markets and by the need 
of banking houses in Latin America. With regard to commerce, 
Great Britain has predominated for many years, her banks having 
been a paramount factor in the expansion of trade by means of 
liberal credits accorded to responsible parties and their financiers 
having contributed very largely through the employment of capital 
to develop the national commerce of the Latin American countries. 
Many industrial enterprises, railways, etc., have been established with 
British capital in South America. 

It has been very accurately stated that credit is the oxygen of com- 
mercial life. 

The obstacles to the establishment of branches in South America of 
American banks have been overcome by the new banking law. The 
National City Bank of New York has already a branch in Buenos 
Aires and another in Rio de Janeiro. These American banking en- 
terprises are now in a position to follow in the steps of their Euro- 
pean competitors. The London & Eiver Plate Bank in Monte- 
video has a capital of $1,500,000. The branches in Salto and Pay- 
sandu (interior towns of Uruguay) are doing a very good business. 
The capital of the four English banks in Montevideo is, in the aggre- 
gate, $2,200,000, and their loans in the country amount to $12,000,000. 
If American trade is going to be developed, it is essential that Ameri- 
can banking institutions lend the necessary assistance not only by 
the establishment of credit but also through their information serv- 
ice, which should and could give comprehensive data with regard to 
the standing and responsibility of business firms. 

And now the Delegation of Uruguay wishes to state that Uru- 
guayan commerce has acquired a high reputation throughout the 
world, and takes pleasure in informing the Conference that the 
Government of Uruguay, desirous of protecting the commerce of 
the country, presented a bill to Congress providing for an interna- 
tional moratorium. The law passed the lower House, and before 
the Senate had an opportunity to sanction it the merchants of Uru- 
guay, through their most representative members, advised the Senate 
not to sanction the law, as everybody was prepared to stand by 
their obligations, and, in fact, they did. Thus the business men of 
Uruguay paid their obligations abroad, notwithstanding the fact 
that they were not able to cash their credits in Europe by reason of 
the moratoria decreed in most European countries. Uruguayan 



URUGUAYAN SUPPLEMENT. 691 

commerce is justly proud of its standing, and is at a loss to under- 
stand the position taken by the bankers and merchants of the United 
States, so much the more so as the European business* men, partic- 
ularly the Germans, have left nothing undone to comply with its 
wishes and requirements, and even during the abnormal conditions 
created by the European war have done their utmost not to depart 
from this policy. 

We strongly present the foregoing facts, which we know are noth- 
ing new to interested parties in the United States, because we believe 
them to be the only practical ones by which commerce between North 
and South America can be developed. 

POSTAL RATES. 

Mail between the American Republics should be regulated by the provisions 
of the South American Postal Convention held in Montevideo in 1911. 

The International Postal Convention of Eome, which generally 
regulates the maximum rates for international mail services, gives to 
all adherent nations the right of modifying the conditions of the 
mail service, provided this tends to its improvement by making it 
cheaper or more efficient. 

The Government of Uruguay, in 1911, initiated a postal congress 
of the South American countries, which was held in Montevideo, and 
discussed special conditions for the South American mail service. 
It established the South American Postal Union and regulated the 
free land and water transportation of the mails of the entire continent. 
It reduced rates as follows: 

The rates fixed by the Eome convention are reduced for the inter- 
change of mail between the contracting countries, thus : 

(1) For letters, to 2 cents for the first 20 grams and 1 cent for each 
20 grams or fraction exceeding the first 20 grams. 

(2) For newspapers and magazines, to 2 J cents for each 100 grams 
or fraction thereof. 

(3) For samples, to 2J cents for each 50 grams or fraction, with a 
minimum postage of 5 cents. The maximum weight of packages is 
increased to 500 grams. 

(4) The fixed duties on certificate acknowledgments of receipts, 
and the demand of information of the registered pieces with no right 
to acknowledgment of receipt, as well as the rate of the express mail 
are reduced to 20 cents. 

(5) The administrations of the contracting countries forego re- 
ceiving any overcharge (supplementary or extra charge) for mail 
for the administrations of the other contracting countries. 

Furthermore, the free transmission of diplomatic and consular 
mail between the respective Governments was accorded, also for the 



692 PAN AMERICAN FINANCIAL CONFERENCE. 

ordinary mail of scientific institutions, and newspapers sent on an 
exchange basis, up to two copies for each address. Possible differ- 
ences which may arise as to the correct interpretation and applica- 
tion of this agreement to be arbitrated. 

As the mail rates are expressed in francs with regard to the Rome 
convention, the following equivalents have been adopted : 



Countries. 


20 cen- 
times. 


10 cen- 
times. 


2\ cen- 
times. 




cents . . 


10 

8 

160 

4 

12 
4 

40 
8 
4 


5 
4 

80 
2 
6 
2 

20 
4 
2 


I 5 




do. . . . 




reis. . 


20 




cents (gold) . . 


* 


Chile 


cents . . 




do.... 


i 

5 




do.... 




do. . . . 


1 




do.... 


h 





The fact that the Montevideo convention should have only affected 
South American countries shows the weak bonds which have existed 
until now among the countries of both Americas. But from the 
moment that common interests of real effectiveness look forward in 
good faith to a closer approximation nothing is more fair and 
logical than the adoption for the whole American Hemisphere of 
the conclusions arrived at for the" South American countries. Cheap 
and easy mail interchange, applying also to cable messages, is one 
of the prime elements for the fostering of closer commercial rela- 
tions. On the other hand, the reduction of postal rates contem- 
plated by the United States would have its full success if the coun- 
tries of Central and North America would adhere, as is to be hoped, 
to the Montevideo convention. 

CUSTOMS CONCESSIONS. 

Resolved, That the Conference declares that there is positive advantage for 
the American Republics in establishing common customs house concessions or 
in providing other means which will secure the marketing of the excess of their 
industrial products. 

The difficulties which some countries of Latin America have 
already experienced in marketing the excess of their industrial prod- 
ucts are more apparent in the countries of small population. 

It is a well-known fact that the only industrial system meeting 
with modern requirements is that which obliges the cost of produc- 
tion to descend to minimum amounts, which occurs with the develop- 
ment of great industries (it being impossible to conceive the lonely 
existence of the small shop beside the large factory). Big factories, 
by multiplying the products, reduce to insignificant quantities the 



URUGUAYAN SUPPLEMENT. 693 

expenses of production. In order to be successful in the present 
time it is necessary that the factory should have all modern improve- 
ments and not stop the machinery from working for even a moment, 
because stopping it would signify the loss of motor power, a margin 
of sufficient expense to bring about defeat, owing to great compe- 
tition. 

The large factory generally has sufficient capacity to fill an entire 
market, to satisfy the necessities of a South or Ceneral American 
country having a small population, to bring about immediately 
superabundance; and when the manufacturer desparingly seeks the 
foreign consumer in the neighboring countries he encounters the 
barrier of customs house duties which can be overcome by the great 
European industries but can not be conquered by the growing 
national industries, for these are halted in their first steps and in 
their legitimate desire to exist and progress. We could mention as 
an example our country, Uruguay, with its million and a half of 
people, where only one factory for hats, for alcohol, for sugar, for 
textiles, or for shoes, would have sufficient capacity to fill all necessi- 
ties ; and when new manufacturers would try to enter in competition 
with those already established, an harmful combination would have 
to take place or else the meritorious manufacturers would be ruined, 
because there would be no way of enlarging consumption to find an 
opening abroad. This would be prohibited by the double obstacle, 
of European industry having dominated in former years, and of cus- 
toms house duties of the bordering countries which do not dif- 
ferentiate between the newly established industries and those which 
for a long time have won a market by suiting the requirements of the 
consumers. 

And let it not be said that the countries of Latin America which 
accomplish the feat of annually exporting to an amount of more 
than one thousand five hundred million dollars do not deserve to be 
listened to, in their just claims of having rights in the markets that 
they themselves have created. No one should think that the equaliz- 
ing of rights in America itself represents merely the placing in 
similar conditions of the American and the European manufacturer. 

We do not pretend in any way to ask special favors which possibly 
would inconvenience us and would cause antagonism in both conti- 
nents. We do wish, however, to be on the same footing, to calculate 
as accurately as possible the advantages that the European manu- 
facturer has in producing articles on account of the small interest 
he pays for capital owing to his greater technical preparation, to 
the reduced salaries of his workingmen, and to the fact that he has 
ruled the market for nearly a whole century. And, after making 
this calculation, to overcome the differences (that no one can deny 



694 PAN AMERICAN FINANCIAL CONFERENCE. 

exist), to such an extent that the American countries can compete 
with the European nations within their own territories. 

On examining the statistics of four of the principal countries of 
South America: Brazil, Argentina, Chile, and Uruguay, we find 
that more than 3 per cent of the foreign commerce of Brazil and 
Chile, notwithstanding all these difficulties, is with the American 
continent; that Uruguay uses more than 20 per cent of importa- 
tions of American origin; and that while Argentina as yet has not 
reached that amount, it tends to approximate it by its prodigious 
growth. Argentina, perhaps more than any other country, would be 
interested in special favors for its industries because it has forty 
thousand factories and shops that give work to one million three 
hundred thousand laborers; and if we examine its trade with the 
neighboring countries, we are filled with wonder at the little im- 
portance this industrial trade has compared with the great inter- 
change which the country makes in the products of its prodigious 
agriculture. 

Two of the Uruguayan delegates have just traveled throughout 
the Republic of Chile in coming to Washington, and they can there- 
fore state that Chile is a country with the greatest manufacturing 
possibilities in the world, on account of its many large waterfalls, 
which in the near future will become motive power owing to the 
proximity of the territory to the seaports and to its enormous coast. 
This clearly shows the future that nature has in store for that Re- 
public, being, as it is, a maritime country devoted to the transporta- 
tion of its incalculable mineral wealth and to the products of its 
manufacturing establishments which could not exist except for the 
white coal which is found in abundance. 

To the Republic of Brazil the proposed resolution would be of 
great assistance, because Brazil also represents in South America 
natural advantages for the industries of North America on account 
of its vast territory, its large population, its unexplored wealth, its 
waterfalls, and, lastly, because its frontier touches nearly all the 
South American countries. 

Of the other South American nations we possess no accurate data, 
but it is logical to suppose that their economic situation is more or 
less similar to that of the four countries which we have studied, and 
to all of whom the favors and reciprocal facilities that we propose 
would prove most advantageous. 

And, with regard to the United States, mutual concessions rela- 
tive to customs-house duties would put that country in a position to 
compete on a fair basis with the European manufacturers and pos- 
sibly to counterbalance the high cost of production of the United 
States with the low cost of manufacturing in Europe. 



URUGUAYAN" SUPPLEMENT. 695 

COMMERCIAL EDUCATION. 

Resolved: That the Conference strongly advocates the interchange of students 
and the establishment of a mercantile museum or permanent exposition of Pan 
American products of the countries of the American hemisphere. 

During the last few years the countries of America have devoted 
considerable attention to the fostering of commercial studies. The 
European countries have shown the way of this technical knowledge, 
and the Germans owe the great successes of their commercial expan- 
sion to the thousands of students who have graduated from their ele- 
mentary and high schools of commerce. 

The High School of Commerce of Uruguay, a Government institu- 
tion, was inaugurated in Montevideo ten years ago. Originally this 
school was a branch of the University of Montevideo, qualified as to 
faculty on the same lines as the faculties of law, medicine, and engi- 
neering. Later it was thought advisable to give this institution a 
self-governing administration under the guidance of prominent mer- 
chants and manufacturers of the country. The success of the High 
School of Commerce of Montevideo is most gratifying, and the 
students graduated from this institution and already engaged in 
active business in banks, factories, and commercial offices have greatly 
improved the efficiency of the same. This success has encouraged the 
administration of the high school to more ambitious plans. 

Commerce has no boundaries, its ambition is to expand throughout 
the world. And this expansion should first take place in the Ameri- 
can Hemisphere. Among the many factors which contribute to the 
success of modern business, traveling is one of the foremost. The 
student that graduates from commercial institutions should not con- 
sider his studies concluded until he has traveled through the coun- 
tries which are to be in the future the field of his activities, getting 
in touch with men and conditions. It is in the early stage of life 
when the mind is more easily impressed and familiarized with new 
and strange conditions and when the men of different countries are 
more solidly united. 

This same thought with regard to international relations has al- 
ready done much for intellectual interchange between the universi- 
ties of the American Hemisphere, but so far it has been limited to 
medicine, law, and engineering. There is no reason why it should not 
extend to commercial activities. In fact these ought to predominate 
as their mission will be to attain the highest figures possible in the 
exchange of wealth. 

The High School of Commerce of Uruguay teaches with the utmost 
efficiency bookkeeping, accounts, geography, political economy, 
languages, particularly English, stenography, etc. The courses last 
three years and it is contemplated to increase this to four years. The 
nature of the studies is both theoretical and practical. Not to men- 



696 PAN AMERICAN FINANCIAL CONFERENCE. 

tion the practical knowledge acquired at the school itself where the 
actual business life is carried on almost to perfection, the students 
enter for some time as clerks in commercial and industrial firms 
where they are in personal touch with the heads of the several depart- 
ments who give them most salutary advice. 

Most of the commercial institutions of Central and South America 
have adopted a similar organization, and there is every reason to be- 
lieve that the student graduated from those schools will be the best 
commercial agent of those countries and a most important factor in 
the Pan American commercial interchange. The Commercial High 
School of Montevideo is actively engaged in perfecting its Mer- 
cantile Museum, which is rapidly reaching completion. The scope 
of this museum is to facilitate the study and knowledge of foreign 
goods. Samples of foreign and national products are exhibited free 
of charge and after some time the manufacturers are at liberty to take 
back their samples. Merchants are invited to visit the museum where 
they may compare prices and conditions and thus two important re- 
sults are obtained: First, commercial education, and, secondly, the 
fostering of interchange. 

The conference should indorse the establishment of business high 
schools throughout the American Hemisphere equipped with mer- 
cantile museums which should exhibit American goods in preference 
to any others. 

With regard to the relation of public credit to a well organized 
system of taxation and a balanced budget it should be agreed that 
the Conference considers it would be advantageous as the basis for 
a good taxing system to decrease the duties in the American Re- 
publics on the primary materials and articles necessary to life, as, 
for example, food and clothing, etc., substituting for them, as far 
as possible, the increase of duties on superfluous articles of luxury 
directly applied or in the form of a State monopoly, which will 
prevent fraud in collecting those taxes. It would also be advisable 
to legislate with regard to graduated taxes on inheritances in order 
to prevent the transmission of capital from one country to another 
for the purpose of avoiding the collection of such taxes. 

The countries of America have abused indirect taxation, prin- 
cipally of the duties of importation, which in new countries in an 
almost exclusive manner affect the consumption of articles necessary 
to life. As countries just beginning to exist, without time for the 
accumulation of wealth and for the possession of private fortunes, 
the American nations have had to go to the poorer classes for 
pecuniary aid, because the food and clothing articles are the only 
ones consumed in sufficient quantity to offer satisfactory incomes, 
the only exception being the articles of luxury of unnecessary con- 
sumption entering through their customhouses. 



URUGUAYAN SUPPLEMENT. 697 

On considering this distribution of wealth and the amount of the 
duties that take away from the poorer classes part of their food 
and clothing in order to contribute to public expenses, it is only 
just to try to discover new sources of income, in order to avoid those 
irritating evils, and to assure to the States the means of carrying on 
their work. 

We are very far from the conception of a State constituting itself 
judge of this matter, because of the every-day requirements of 
public service which make it an obligation of the Government to pro- 
tect the poor and take care of the sick that have no way of caring 
for themselves, and which cause increased expenses in the school 
system and in sanitary and public works in an endeavor on the part 
of the State to keep itself abreast with other civilized nations. 

Not only have the European nations doubled their appropriations 
for the reasons that we have just mentioned, but nearly all the 
American States have done likewise. And it has been the indirect 
duty (namely, that on importations collected in the customhouses of 
maritime or land frontiers) which has sustained this enormous 
increase of the expenses of the State. 

In American countries incomes are taxed under the general name 
of trade assessments, and thus industry, commerce, and the liberal 
professions are made to yield to the State part of their profits; but 
it is clear that the principal income coming through accumulated 
fortunes earned by labor and through inheritances from century to 
century do not offer the State treasuries of American nations sums 
equal to those that may be obtained in Europe. 

It is necessary, therefore, to think of other kinds of taxes that 
may overcome these disadvantages. Two classes of measures should 
be considered by the American States as being of great importance. 

The first is that for high imposts, etc., on articles that are not the 
most pressing necessities, to be obtained by means of ordinary duties 
or by State monopolies, and the second that of inheritance taxes 
arranged in double progression, based on the amount of the capital 
and the degree of relationship. 

The monopolies of the manufacture and sale of articles in favor 
of the State should only apply to those which are not prime neces- 
sities of life. 

By monopolizing the sale of such products the prices can soar 
enormously with great advantage for the National Treasury in the 
same way that by properly handling their manufacture they can 
make great economies and thus also increase the profits. For ex- 
ample, as far as the monopoly of alcohol is concerned, the State may 
amend the law by prohibiting the sale of noxious products of private 
manufacture, which lead men to degeneracy and insanity. 



698 PAN AMERICAN FINANCIAL CONFERENCE. 

Besides measures for regulating monopolies and gambling, the 
countries of America should adopt the measure of taxing inheritances 
which avoids the imposition of high duties on the parents and chil- 
dren and husbands and brothers, etc., but which frankly declares to 
be coheirs persons of more distant relationship. 

The present family is not the family of old, that of the small vil- 
lage, in which everybody was related, even those of the tenth col- 
lateral degree. Such ties of blood are very distant ones now, and 
have been kept up only through the living together within small 
limits. The family of to-day is a different one ; it is that of a great 
city, where people are unacquainted with their neighbors, even though 
these be their relatives, of the same stock ; it is a family that is sub- 
ject to the increasing necessities and to the insatiable desire for com- 
fort and regulated by the fruitful activities of the present. 

In these times we live in feverish activity. The tendency of every- 
one is to abandon their country homes for the large cities, and, with 
the exception of the families living permanently in the country that 
keep up old traditions, the circumstances are not such nowadays as 
to permit the cultivation of widespread bonds of relationship which 
are not in harmony with true sentiments of friendship. 

Society has no positive interest in the compulsory acknowledgment 
of distant relationship by decree of the law, it being sufficient in 
order to secure the maintenance of a united, strong, and permanent 
family to consider that the only ones forming it are the parents, the 
children, the husbands, the wives, the brothers, and sisters. 

The modern legislator has no reason to consider distant relatives, so 
that when unexpected connections from India present themselves he 
can and will claim without scruple the participation of the State in 
the inheritance in order to be able to treat generously those who are 
indigent and sick in the hospitals and asylums. There are other cir- 
cumstances that give to us — the Americans — the right to be more 
strict in matters of inheritance taxes than the European nations. 
Those that are interested in this matter in Europe have been able to 
show that it is a tax that must affect the capital of those distantly 
related, and thus in France, England, and Germany it reaches down 
to degrees of relationships, relationships that represent 24 and even 
29 per cent of the cases of inheritance. 

The customary percentage in Europe is, as a rule, half of the usual 
interest in America, there being levied 7 per cent on an inheritance in 
a European country. This is double the annual interest, and if in 
an American country an inheritance should be taxed on this scale the 
amount collected would scarcely be one year's interest. 

In these latter years the principal countries of Europe have in- 
creased the taxes on inheritances, and some of them have entered into 



URUGUAYAN SUPPLEMENT. 699 

treaties whereby the obligation is imposed on their bankers to declare 
the existence of funds or property belonging to the citizens of the 
contracting countries that may die, so as to avoid attempts to evade 
the tax. 

Therefore it would be advisable that in America the States should 
lend aid to one another, in order to regulate the collection of this tax. 
The most efficacious way to stop fraud and prevent the transfer of 
personal property from one country to another, and thereby evade the 
tax, would be the adoption of a uniformity of rates of taxation by 
neighboring countries and to make obligatory the declaration by all 
bankers of the securities deposited in their safes when the death of 
the owner of the same shall take place. 

(Signed) Pedro Cosio. 

Gabriel I^erra. 

Carlos Maria de Pena. 



INDEX. 



Acevedo, Senor Dr. Ramon F. : Page. 

Address 104-105 

Delegate from Panama 8,25,42,64 

Member of Committee on Uniformity of Laws 31,70,143 

Aerts, G. A. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference 44, 57 

Agricultural resources : 

Argentina 274, 557 

Dominican Republic 137 

Ecuador—., 150-151 

Nicaragua 584 

Paraguay 597 

Aguilar, Senor Dr. Roberto : 

Delegate from Salvador 8,25,42,67 

Aguirre, Senor Dr. Guillermo, honorary president of Conference 39 

Aldao, Senor Dr. Ricardo C. : 

Delegate from Argentina 8, 12, 24. 30, 41, 52 

Member of Committee on Transportation 30, 71, 279 

Memorandum submitted by 535-550 

Remarks on transportation 273-274 

Reply to Secretary McAdoo's remarks on anniversary of Argentina. 148 

Report summarized by 273-275 

Trade relations, consideration of 134, 148, 255 

Alexander, James S., member of Reception Committee 25 

Allen, Frederic W., representative of United States at conference 44 

Alva, Martinez de. See Martinez de Alva. 

Alzamora, Senor Dr. Isaac : 

Address 106-107 

Chairman of Conference Committee, Peru 66 

Delegate from Peru 8, 25, 30, 42, 66 

Honorary vice president of Conference 40 

Member of — 

Committee on Transportation 30,71 

Committee on Uniformity of Laws 31, 70, 143 

Present situation in Peru 277 

Remarks on harmonious work of Conference 264-265 

701 



702 INDEX. 

Ancfzar, Senor Dr. Roberto : Pase. 

Delegate from Colombia 8, 24, 41, 56 

Member of Committee on Uniformity of Laws 31, 70, 142 

Remarks on results of Conference 257 

Anderson, Larz, reception to delegates 502 

Annapolis, Md., delegates visit 493 

Aparicio, Senor Dr. Rafael, member of official party on trip 503 

Arbitration of Commercial Disputes — 
Advocated in trade disputes by — 

Argentina . 274-275 

Cuba 251,383 

Paraguay 276 

Peru 446 

Uruguay 684-4387 

Venezuela 466 

Dr. Aldao suggests system of 317 

Ardrey, J. Howard: 

Representative of United States at conference 44, 67 

Argentina : 

•Agricultural resources 274 

Ambassador — 

Invited to attend conference as special guest of Secretary of 

the Treasury 43, 52 

Anniversary congratulations . 147 

Arbitration in trade disputes 274-275 

Banks and banking 316-318, 555-557 

Conference committee 52 

Finances — 

Memorandum of 553-557 

Remarks of Dr. Pearson on 133-134 

Group conference report 315-318 

Group report summarized 273-275 

Improved banking facilities necessary 274 

International trade 541-543 

Loans 554-555 

Merchant marine, fast service 316-317 

Permanent Group Committee 528 

Preliminary draft of resolution on international commercial arbi- 
tration 548-550 

Remarks relative to group report 255 

Resolution on banking facilities 274 

Stock raising 274 

Suggestions for Pan American uniformity in commercial relations-- 547 

Telegram from the President of 193-194 

Telegraphic service 273, 317 

Trading facilities 315-317 

Transportation 315-316 

Uniformity of commercial law, etc 535-550 

Arjona, Senor Dr. Aristides : 

Chairman of Conference Committee, Panama 64 

Delegate from Panama 8,25,42,64 

Economic conditions in Panama, remarks on 264 

Honorary president of the Conference 39 

Speaker at banquet on trip 499 



INDEX. 703 

Arias, Senor Dr. Ramon, jr. : Page. 

Delegate from Panama 8, 25, 42, 64 

Armour & Co 498 

Armstrong, John S., member of Permanent Group Committee 531 

Armstrong, Joseph G., remarks 496 

Arnold, John J. : 

Address 224-227 

Banking facilities 226 

Laying foundations for commerce 225 

Remarks 498 

Representative of United States at Conference 44, 66 

Austin, Richard L., representative of United States at Conference 44, 63 

B. 
Babson, Roger W. : 

Address 239-240 

Member of Permanent Group Committee 532 

Representative of United States at Conference 44, 66 

Suggests committee on shipping bill 290 

Bacon, Hon. Robert: 

Member of Permanent Group Committee 529 

Baker, Charles F., group secretary for Ecuador 60 

Ballivian, Senor Dr. Adolfo, delegate from Bolivia 8, 24, 41, 53 

Baltimore, Md., delegates' visit to 494 

Bancroft, Chas. G., representative of United States at Conference .44 

Bankers' Association of the Pacific Coast and Rocky Mountain States, 

telegram from 233-234 

Banks and banking: 

Argentina 316-318, 555-557 

Better facilities urged by Bolivian delegation 255 

Bolivia 250,324-328 

Branch banks — 

Advocated by Dr. Hector Velazquez 276-277 

Establishment of _ 118, 253, 258-259 

Federal Reserve Board's power to establish in foreign countries- 163 

Remarks of F. A. Vanderlip on 140-141 

Brazil 254, 335-338 

Changes brought about by Federal reserve act 155-164 

Chile 565-567 

Colombia 364-365 

Costa Rica 251, 374 

Dominican Republic 252, 394-395 

Ecuador 405-406,577 

Establishment — 

In Latin America ._- 210 

In Peru 277 

Extension of local facilities advocated by Peruvian delegation 265 

Facilities, remarks on — 

R. C. Aldao 273 

J. J. Arnold 226 

Wm. C. Redfield 130 

Foreign, tables of 566 

Guatemala 253, 416-417, 420 



704 INDEX. 

Banks and banking — Continued. Page. 

Honduras 275, 424^25 

Law of checks 214 

Moratorium 213 

National and State 156 

Nicaragua 583 

Panama 437 

Paraguay 276, 441, 600-601 

Peru 445, 611-613 

Salvador 253, 449-450, 624, 631-632 

United States laws regarding _ 261-262 

Uruguay 253, 456 

Venezuela 659 

See also Credit ; Federal reserve banks ; Loans. 

Banquet tendered delegates, proceedings at 471-490 

Bard, Dr. Harry Erwin: 

Group secretary for Peru 66 

Member of Reception Committee ,_ 25 

Barrett, Hon. John: 

Address 29, 78, 200-206 

Appreciation of services 32 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Committee to Visit South and Central America 527 

Representative of United States at conference 44 

Tribute from — 

Secretary Wm. G. McAdoo 490 

Hon. Dudley Field Malone 489 

Dr. L. S. Rowe 487 

Barros Luco, Ram6n, reply to President Wilson's cable 508 

Barroso, Senhor Dr. Sabino, honorary president of Conference 59 

Baun, Claud de: 
Secretary to — 

Committee on Transportation 71, 309 

Committee on Uniformity of Laws 70, 303 

Benavides, Gen., reply to President Wilson's cable 512 

Bertrand, F., reply to President Wilson's cable 511 

Bertron, S. R., member of Reception Committee 25 

Beverley, Mass., delegates' visit to : 502 

Bills of exchange: 

Acceptance of 163 

Discussed at The Hague conference 215,216 

Ecuador memorandum 578 

Remarks — 

C. A. Conant 213-214 

H. R. Eldridge 218-219 

See also Uniformity of Laws. 
Bippus, W. F. : 

Member of Permanent Group Committee 528 

Representative of United States at Conference 44, 53 

Bissell, Hon. Herbert P 500 

Bixby, William K., representative of United States at Conference 44, 68 

Black, David P., member of committee to visit Central and South 

America 527 



INDEX. 705 

Page. 

Blaine, James G., work acclaimed by Latin America 94, 106 

Blankenburg, Rudolph, welcomes delegates 495 

Bolivar, Simon: 

Letter to Lafayette 667-668 

Pan American Congresses, initiator of 657 

Bolivia : 

Appointment of High Commission in 16 

Banking facilities 255 

Central commercial agency advocated 250, 255, 256, 326 

Commercial laws 323, 324 

Conference Committee, chairman of 53 

Currency . 327 

Debts- 
Foreign 323, 331 

Internal 331 

Envoy Extraordinary and Minister Plenipotentiary of — 

Invited to attend Conference as special ^guest of Secretary of 

the Treasury 43, 53 

Fruit?, tropical 250,322 

General remarks on 330 

Group Conference report 321-331 

International trade 250, 330 

Loans 328 

Merchant marine 323 

Mineral resources 250, 321-322, 329 

Monetary situation 250, 324-325 

Natural resources 250, 321 

Navigation, inland 323 

Permanent Group Committee 528 

Political situation 323 

Present banking situation 325 

Present conditions in 134 

Public improvements, financing of 325-326 

Public revenues 330 

Railways 250, 322-323, 328-329 

Reduction of taxes urged % 255 

Remarks relative to group report 255-256 

Report summarized 250 

Rubber, important product of 250, 322 

Stock raising 250, 322 

Timber 250, 322 

Trade and commerce.- 250, 321-324 

Trade, effect of war on 328 

Transportation facilities., 250, 323 

Bonded warehouses : 

Establishment of 277 

Receipts as collateral security 251 

Bonds : 

Chile 566 

Ecuador 404 

Bope, Henry P., remarks _ 496 

98257°— 15 45 



706 INDEX. 

Boston, Mass.: Page. 

Delegates visit to „ 501-502 

Visit of Chinese merchants commission 501 

Boyd, L. C, representative of United States at Conference 44, 65 

Boyer, Joseph, luncheon to delegates 499 

Branch, H. N., group secretary for Guatemala 61 

Branch banks. See Banks and banking. 

Brand, Charles J., representative of United States at Conference 44. 57 

Brazil : 

Ambassador — 

Invited to attend Conference as special guest of Secretary of 

the Treasury 43, 54 

Banking 254,335-337 

Bureaus of standards, establishment of 254 

Conference Committee, chairman of 54 

Foreign commerce, 1910-1914 341 

General suggestions of committee 339-344 

Group conference report__«_ 333-346 

Imports and exports 335-336, 341-346 

Local commercial banking 336-338 

Natural resources, study of, recommended 338 

Parcel post, establishment of 255 

Permanent Group Committee 528 

Population and surface 1 346 

Remarks relative to group report 256-257 

Report summarized 254-255 

Telegraphic service, extension of 255 

Trade and commerce 335, 338-339, 341-343 

Trade-marks, protection for 254 

Brookline, Mass., delegates visit to 502 

Brown, Franklin Q. : 
Member of — 

Committee on Transportation 30,71,152 

Permanent Group Committee 530 

Reception Committee 25 

Representative of United States at Conference 44, 58 

Brown, James : * 

Member of Permanent Group Committee 531 

Representative of United States at Conference 44, 63 

Bryan, William Jennings 28 

Address 89-91 

Appreciation of 25S, 264, 265 

Discusses results of Conference :__" 291-295 

Joint reception to members 76 

Letter of invitation, transmits 23-24 

Luncheon to delegates 77, 78 

Proposed treaty between United Slates and Nicaragua, remarks on 263-264 

Remarks at conclusion of Conference 294-295 

Response to toasts 471-473 

Welcome by 75 

Work acclaimed by Latin America 106 

Buenos Aires, meeting of International High Commission to be held in_ 17 

Buffalo, N. Y., delegates' visit to 500 



INDEX. 707 

Page. 

Bureau of information 72 

Bureau of Printing and Engraving 28 

Bureau of standards, Brazil recommends establishment of 254 

Burke, Hon. John, representative of United States at Conference 44, 67 

Burleson, Hon. Albert S. : 

Address 29, 76, 119-122 

Money-order service 121 

Parcel Post System 120-121 

Postal rates i__ 119 

Representative of United States at Conference 44 

Burrage, Commander Guy H., welcome to delegates 494 

Busch, August, delegates visit home • 497 

Bustillos, V. Marquez. See Marquez. 
Butterworth, William : 

Member of permanent group committee 532 

Representative of United States at Conference 44, 68 

C. 

Cabezas, Senor Dr. Augustin, honorary president of Conference 39 

Cable correspondence between United States and Latin American coun- 
tries 505-513 

Cable service, Uruguay 684 

Cables, remarks by Secretary Redfield on necessity for 127 

Cabrera, Manuel Estrada, reply to President Wilson's cable 510 

Calderon, Senor Dr. Ignacio : 

Address 92-93 

Chairman of conference committee 53 

Delegate from Bolivia S, 24, 41, 53 

Indorses invitation to financiers to visit Latin America 236 

Honorary vice president of Conference 39 

Member of Committee on Uniformity of Laws 31, 70, 142 

Memorandum, remarks relative to present conditions in Bolivia 134 

Merchant Marine, discussed by 255 

Railways, remarks on 256 

Cancio, Senor Dr. Leopoldo, honorary president of Conference 39 

Carbo, Senor Dr. Enrique, honorary president of Conference 39 

Cardenas, Dr. Roman : 

Annual report as Minister of Finance of Venezuela 668-669 

Honorary president of Conference 39 

Cavalcanti, Senhor Dr. Amaro : 

Address 93-96 

Chairman of Conference Committee 54 

Delegate from Brazil 8, 12, 24, 30, 41, 54 

Member of — 

Committee on Transportation 30, 71, 279 

Committee on Uniformity of Laws 31, 70, 142 

Remarks on results of Conference 256-257 

Honorary vice president of Conference 39 

Central America : 

Commercial needs 29 

Relations with United States 32 

Trade development— „™L*__™ M _*_ 678-680 



708 INDEX. 

Page. 

Central Commercial Agency recommended by Bolivian delegation 250, 

255-256, 326 

Chamorro, Gen. Emiliano, on Conditions in Nicaragua 433-434 

Chicago, 111., delegates visit to 497-498 

Chile : 

Ambassador — 

Invited to attend Conference as special guest of Secretary of 

the Treasury 43, 55 

Appointment of high commission in 16 

Banking system 565-567 

Bonded warehouse, receipts as collateral security 251 

Credit, discount, and rediscount facilities 251 

Debt, summary of 568-569 

Export duty on nitrates 251 

Group Conference report 349-350 

Imports, principal 573 

Markets, inter-American, expansion of 572-574 

Memorandum submitted on questions suggested by the Secretary of 

the Treasury 559-574 

Merchant marine 149 

Mineral resources 563-564 

Monetary situation 564-565 

Municipal loans 1 569 

Permanent Group Committee 529 

Permanent Inter American Commission 251 

Private enterprises, financing of 571-572 

Public finance 250, 561-563 

Remarks relative to group report 257 

Report summarized 250-251 

Trade, effect of war on 562 

Chisholm, Joseph L. B., official stenographer on trip 501 

Church, Samuel Hardin, remarks 496 

Clapham, A. G., representative of United States at Conference 44, 64 

Clarkson, Harold, group secretary for Paraguay 65 

Clausen, John: 
Member of — 

Committee to visit South and Central America 527 

Permanent Group Committee 530 

Memorandum submitted 249, 673-6S0 

Representative of United States at Conference 44, 60 

Colombia : 

Association recommended to raise money for development of 360 

Banking 364-365 

Commerce through Panama Canal 354 

Currency 363 

Debt, remarks by Dr. Perez Triana on 135 

Description of 356, 358 

Economic situation 251, 360-362 

Envoy Extraordinary and Minister Plenipotentiary — 

Invited to attend Conference as special guest of Secretary of 

the Treasury 43, 56 

Foreign debt 362 



INDEX. 709 

Columbia — Continued. Page. 

Group conference report 351-369 

Imports and exports 368-369 

Mining 356-357 

Monetary unit 364 

Money in circulation 363 

Natural resources 356 

Permanent Group Committee 529 

Private enterprises, financing of 365-367 

Prospective business 356 

Remarks relative to group report— „. 257 

Report summarized 251 

Stock raising 357 

Timber 357-358 

Trade, effect of war on 353, 360-366 

Transportation 367-368 

Columbus Memorial Library 202 

Commerce : 

Argentina 315-317, 539-543 

Between United States and Latin America 203 

Bolivia 250, 321-324, 328, 330 

Brazil 338-339, 341-343 

Central America 678-680 

Chile 96-97, 562 

Colombia — 

Advantages through Panama Canal 1 354 

Effect of war on 353, 360-366 

Consideration by Dr. R. C. Aldao 134, 148, 255 

Costa Rica, effect of war on 373 

Cuba 380-387 

Dominican Republic 393, 396 

Ecuador 579 

Extensions to Latin American Republics 208 

Guatemala 415, 417-418 

Honduras 423-424 

Laws, uniformity of, relating to 383 

Nicaragua 584 

Panama _ 591 

Paraguay 441,442 

Peru 445, 607, 608-610, 614-615 

Salvador 253, 451, 629 

South America 678-680 

Uruguay 644-645, 639-654 

Venezuela 464, 658-659, 662-666, 671-672 

Commercial Agency, Bolivia 326 

Commercial Credit. See Credit. 

Commercial education. See Education. 

Commercial entities, Ecuador 577 

Commercial laws: 

Bolivia J 323-324 

Cuba 251,383 

Commercial paper, impossibility of rediscounting 159 



710 INDEX. 

Commercial treaties: Page. 

Between Cuba and the United States 379-384 

Proposal of treaty between Nicaragua and United States 260-261, 

263-264, 434 

Salvador 620-621 

Commercial travelers 126, 301 

Committees : 

Appointments of Transportation and Uniformity of Laws— 148-152, 193, 207 
Committee on Establishment of an International Court, members— 31 

Committee on Transportation and Communication — 

Reports of 278-281, 287-288, 307-309 

Members 30, 31. 71 

Suggestions for creation of 143 

Committee on Uniformity of Laws : 

Members 31, 70, 142-143 

Report 284-287, 301-303 

Suggestion for creation of 118 

Group Conference — 

Remarks by Dr. Juan Cueva Garcia 138 

Remarks by Hon. W. G. McAdoo on 292-293 

Permanent group committees, appointments 519-520, 525, 528-532 

Special committee to visit South and Central America, members of- 527-528 
Conant, Hon. Charles A. : 

Address on Exchange and Finance 212-216 

Member of Committee on Uniformity of Laws 31, 70, 143, 228 

Representative of United States at Conference 44, 58 

Concha, Jose Vicente, reply to President Wilson's cable 508-509 

Cone, Caesar, representative of United States at Conference 44, 54 

Conklin, Franklin, representative of United States at conference 44, 60 

Coolidge, J. Randolph, representative of United State at Conference- _ 44, 64 
Cooper, D. Y., member of Committee to visit South and Central 

America 527 

Cordeira da Graca, Admiral 502 

Cordova, Senor Dr. Leopoldo : 

Address 103-104 

Delegate from Honduras 8,24,42,62 

Honorary president of Conference 39 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Official party on trip 503 

Remarks on results of Conference 259-260 

Cornell, Charles L., representative of United States at Conference 69 

Cosio, Senor Dr. Pedro : 

Address ; . 108 

Appreciation of efforts of the Secretary of the Treasury 235-236 

Chairman of Conference Committee, Uruguay 68 

Delegate from Uruguay 8, 12, 25, 30, 42, 68 

Honorary president of Conference 39 

Member of Committee on Transportation 30, 71, 279 

Remarks on Pan Americanism . 266 

Uruguayan proposal for tour by North Americans 235-236 



INDEX. 711 

Costa Eica : Page. 

Banking system 251,374 

Conference Committee 57 

Credits, extension of 251 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,57 

Group conference report 371-376 

Inter-American markets 251, 375 

Merchant-marine facilities 251, 376 

Monetary situation — 251,374 

Permanent Group Committee, appointments 529 

Postal facilities 376 

Private enterprises, financing of 251, 374-375 

Public finance 373-374 

Remarks relative to group report 257 

Report summarized 251 

Trade, effect of war on 373 

Transportation facilities 251, 376 

Coster, Morris, member of Permanent Group Committee 529 

Cramp, William, & Sons Ship & Engine Building Co _'_ 495 

Crane, Charles R., representative of United States at Conference 45, 64 

Crean, Thomas F., member of Permanent Group Committee 531 

Credit : 

Between United States and Latin America 209 

Chile, discount and rediscount facilities 251 

Commercial credits under Federal reserve act 118 

Costa Rica, extension of 251 

Cuba 251, 3S2 

Essential to development of commerce 9, 208 

Extension of 244 

Interchange of financial information urged by Uruguayan dele- 
gation 271-272 

Long-time, remarks by Secretary Redfield on 124-125 

Refusal to merchants and farmers 156 

Salvador 253, 619-620 

Short and long, remarks by P. M. Warburg on 168, 171 

Short-term, remarks by H. R. Eldridge on 221 

Uruguay 253, 456, 689-691 

Venezuela 465, 665 

Crennan, C. H., group secretary for Cuba 58 

Crosby, John, member of Permanent Group Committee 529 

Cuadra, Sefior Dr. Pedro Rafael : 

Address 104 

Conditions in Nicaragua, explanation of 433-434 

Delegate from Nicaragua . 8, 25, 42, 63 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Official party on trip 503 

Memorandum submitted 581-587 

Need of an international stable currency 139 

Honorary vice president of Conference 40 

Cuadra, Senor Dr. M. Eulogio, honorary president of Conference 39 



712 INDEX. 

Cuba : Page. 

Appointment of High Commission in 16 

Commercial arbitration 251, 383 

Commercial credits 251, 382 

Commercial information 382-383 

Currency 379-380 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend conference as special guest of the Secretary 

of the Treasury 43, 58 

Group conference — 

Committee 58 

Report 377-390 

Memorandum 384-390 

Permanent Group Committee 529 

Reciprocity treaty with United States 251, 379-384 

Remarks relative to group report 257-258 

Report summarized . 251 

Trade- 
Effect of war on r 385-387 

Relations with United States 380-382, 384 

Transportation 135, 381 

Uniformity of commercial laws 251,383 

Oueva Garcia, Senor Dr. Juan; 

Address 102-103 

Chairman Group Conference Committee : 60 

Delegate from Ecuador 8,24,41,60 

Remarks 138, 150-151 

Honorary vice president of Conference 40 

Curley, Hon. J. M 502 

Currency : 

Bolivia — 327 

Colombia 363 

Cuba 379-380 

Ecuador 577 

Inflation of 138 

National-bank notes, elasticity of 157-158, 162 

Nicaragua, need of sound and stable 138-139 

Peru 614 

Curtiss, Frederic R., representative of United States at Conference 45, 67 

Customs concessions, advantage of 692 

Customs duties. See Tariff. 

D. 

Davidson, G. A., member of committee to visit South and Central 

America 527 

Davies, Hon Joseph E. : . , 

Address 78, 195-200 

Representative of United States at Conference 45,56 

Davison, Henry P., member of Reception Committee 25 

Dean, Charles Ray, group secretary for Brazil 54 

Deans, H. G. P.: 

Member of Permanent Group Committee 532 

Representative of United States at Conference 45. 67 



INDEX. 713 

Debts : Page. 

Bolivia 323 

Chile 568-569 

Colombia 362 

Ecuador 404 

Honduras 425 

Peru 611 

Unified interior debt, Uruguay 652 

Venezuela 467-468, 660-661 

Delano, Hon. F. A., representative of United States at Conference 45, 52 

De Lanoy, William C, representative of United States at Conference— 45, 52 
de Lima, E. A. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 45, 57 

de Navarro, Alfonso, representative of United States at Conference 45, 65 

Denby, Hon. Edwin 499 

Desvernine y Galdos, Senor Dr. Pablo : 

Address 99-101 

Chairman of Conference Committee, Cuba 58 

Delegate from Cuba 8, 24, 41, 58 

Honorary chairman of meeting at Philadelphia 495 

Honorary vice president of Conference 40 

Member of Committee on Uniformity of Laws 31, 70, 143 

Remarks 135, 139 

Detroit, Mich., delegates' visit to 498-^99 

Diaz, Adolfo: 

Administration praised 260 

Reply to President Wilson's cable 511 

Dollar acceptance 163 

Dollar diplomacy 199 

Dollar exchange 199, 220-222 

Dominican Republic : 

Agricultural resources 137 

Banking situation 252, 394-395 

Conference committee , 59 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43, 59 

Group conference report 391-399 

Inter- American markets 252. 397 

Loans 395 

Merchant-marine facilities 397-399 

Monetary situation 394 

Permanent Group Committee 529 

Postal facUities 252, 398-399 

Present banking situation 252, 394-395 

Private enterprises, financing of 252, 395-396 

Public finance 393-394 

Public improvements, financing of 395 

Remarks relative to group report 258 

Report summarized 251-252 

Resolution relative to postal laws 399 

Tobacco, duty on 252 



714 INDEX. 

Dominican Republic — Continued. Page. 

Trade, effect of war on 393, 396 

Transportation facilities 397-399 

Dougan, Robert, press correspondent 1 504 

Douglas, William H., representative of United States at Conference— 45, 66 
Downey, Hon. George E., representative of United States at Conference. 45 

Dunaway, J. A., group secretary for Colombia 56 

Dunne, Hon. Edward F 498 

Duval, G. L. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference 45, 66 

E. 

Earle, J. M., member of Permanent Group Committee 529 

Eaton, Frederick H. : 

Member of Permanent Group Committee . 530 

Representative of United States at Conference 45, 55 

Ecuador : 

Agricultural resources 150-151 

Appointment of High Commission in 16 

Banking and currency 405-406, 577 

Bills of exchange 578 

Bonds, tables of 404 

Commercial entities and contracts 577 

Commercial facilities 579 

Conference committee 60, 61 

Customs and traveling agents 578 

Debts, observations on 404 

Duty on samples 411 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,60 

General observations 411 

Group Conference report 401-411 

Group report summarized 252, 275-276 

Immigration and Mining 579 

Inter-American markets 409-410 

Memorandum submitted by delegation 575-580 

Merchant-marine facilities 410-411 

Monetary situation 404-405 

Natural resources 102 

Navigation 579 

Permanent Group Committee 530 

Postal, telegraph, and telephone service 578 

Private enterprises, financing of 407-409 

Public finance 403 

Public improvements, financing of 407 

Remarks relative to group report 258-259^ 

Tax on salesmen 411 

Trade-marks and patents 579 

Transportation facilities 410-411 

Edson, John Joy, representative of United States at conference 45, 69 



INDEX. 715 

Education : Page. 

Guatemala 252 

Uruguay 253, 457, 695-696 

Edwards, Seiior Dr .Alberto, honorary president of Conference 39 

Eldridge, Herbert R. : 

Address 215-224 

Remarks 271-272 

Representative of United States at Conference 45, 68 

Elliot, L. Elwyn, article on Venezuela 670-671 

Elliott, Hon. Milton C, representative of United States at Conference- 45, 53 

Emerson, Guy, representative of United States at Conference 45, 59 

Erskine, A. R., representative of United States at Conference 45, 65 

Esberg, A. J., representative of United States at Conference 45, 58 

Estrada Cabrera, Manuel, reply to President Wilson's cable 510 

Exports. See Imports and exports. 



Fahey, Hon. John H. : 

Member of International High Commission 16 

Representative of United States at Conference 45, 65 

Resolutions offered by 286-287 

Fairchild, Samuel W., representative of United States at Conference 45, 66 

Falconer, Charles E. : 

Member of Permanent Group Committee 530, 532 

Representative of United States at Conference 45, 59 

Fancher, E. R., representative of United States at Conference 45, 59 

Farquhar, A. B., representative of United States at Conference 45, 58 

Farrell, James A. : 
Member of — 

Committee to visit South and Central America 527 

Permanent Group Committee 528 

Reception Committee 25 

Representative of United States at Conference 45 

Federal Advisory Council, duties of 161 

Federal Reserve Act _ 9-10 

Accomplishments of, remarks of Hon. Charles S. Hamlin 159-164 

Changes brought about by 155-164 

Remarks — 

Hon. Wm. G. McAdoo 118 

H. R. Eldridge 222,223 

F. A. Vanderlip 140-141 

Paul M. Warburg 165-178 

Federal reserve banks: 

Agencies in foreign countries 8,11 

History of, remarks by P. M. Warburg 168-171 

Management of 160 

Powers of 10-11 

Privileged to establish foreign agencies 118 

Federal Reserve Board 8, 10 

Approval for establishing foreign agencies 118 

Duties of 160-161 

Power to establish branch banks in foreign countries ; 163 



716 INDEX. 

Paee. 

Federal Trade Commission—- 8 

Financial course of American nations 165-173 

Financial situation. See Public finance. 

Fisher, Edmund D., representative of United States at conference 45, 62 

Fisher, B. J. : 

Address . 210-212 

Representative of United States at Conference 45, 62 

Fletcher, Duncan U. : 
Member of — 

Committee to visit South and Central America 527 

International High Commission . 16, 527 

Flint, Charles R., representative of United States at Conference 45, 55 

Flood, Hon. Henry D. : 

Address- , 231-233 

Representative of United States at Conference 45, 52 

Food and drugs laws, Peru 278, 446 

Ford, Henry: 

Luncheon to delegates 499 

Member of Permanent Group Committee 528 

Foreign trade. See Commerce. 

Forgan, James B. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference 45, 54 

Fortin, Senor Dr. Daniel : 

Delegate from Honduras 8, 24. 42 

Member of official party on trip 503 

Franca y Alvarez de la Campa, Senor Dr. Porfirio : 

Delegate from Cuba ! 8,24,41,58 

Member of official party on trip 503 

Francis, Hon. David R. : 

Address 281-283 

Discussion on transportation report .__ 288 

Member of — 

Committee on Transportation 30, 71, 193 

Committee on Uniformity of Laws 31, 70, 143 

International High Commission 16, 527 

Permanent Group Committee 530 

Representative of United States at Conference 46, 61 

Requested to visit Guatemala 420 

Transportation — 

Remarks :_ 281-283 

Resolution on 283 

Fredrick, Leopold, representative of United States at Conference 46, 55 

Freight rates, Panama Railroad Co 253 

Fuerth, Otto H., representative of United States at conference 46, 53 

Fuller, Paul : 

Member of — 

Committee on Transportation 30, 71, 152 

Permanent Group Committee 530 

Representative of United States at conference 46, 58 



INDEX. 717 

G. 

Page. 
Gald6s, Senor Dr. Pablo Desvernine y. See Desvernine y Galdos. 
Gallardo, Senor Dr. Enrique : 

Delegate from Ecuador 8, 24, 41, 60 

Member of official party on trip 503 

Galliher, W. T., representative of United States at conference 46, 62 

Gama, Ambassador Domicio da : 

Response to toast 473-474 

Toast to President of the United States 471 

Tribute to Hon. W. G. McAdoo 474 

Garcia, Esteban S., group secretary for Honduras 62 

Garcia, Senor Dr. Juan Cueva. See Cueva. 
Garrison, Hon. Lindley M. : 

Remarks. 245 

Delegates to be guests of, at special drill at Fort Myer 80 

Gary, Hon. Elbert H. : 

Member of International High Commission -. 16, 527 

Representative of United States at Conference 46, 52 

G^ithright, Owen, member of Permanent Group Committee 531 

Gautier, Senor Dr. Salvador, honorary president of Conference 39 

General Committee on Transportation and Communication. See Com- 
mittees. 

Gillman, Horace M., member of official party on trip 502 

Gittings, J. S., Jr. : # 

Appreciation of services 32, 200 

Assistant secretary general 72 

Tribute from Assistant Secretary of the Treasury Andrew J. 

Peters 485 

Given, T. H. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 46, 60 

Gladding, Nelson A., member of Permanent Group Committee 531 

Godwin, Earl, assistant in charge of press arrangements on trip 504 

Good, J. J., in charge of baggage arrangements on trip 504 

Goldstein, L. S., representative of United States at Conference 46, 62 

Gomez. See Braz P 508 

Gonzalez, Alfredo, reply to President Wilson's cable 509 

Gonzales, Senor Dr. Vicente: 

Appreciation of Secretary McAdoo's invitation 496 

Delegate from Ecuador 8, 12, 24, 41, 60 

Member of — 

Committee on Transportation 30, 71 

Committee on Uniformity of Laws 31, 143 

Official party on trip 503 

Remarks 258, 288-289 

Gonzalez-Lamas, A., group secretary for Nicaragua 63 

Goodhue, F. A., representative of United States at Conference 46, 53 

Goodwin, Elliot H. : 
Member of — 

Committee to Visit South and Central America 527 

Permanent Group Committee 532 

Representative of United States at Conference 46, 66 



718 INDEX. 

Page. 

Gorrell, Frank E., representative of United States at Conference 46, 56 

Grace, Joseph P. : 

Member of Permanent Group Committee 528 

Representative of United States at Conference 46, 67 

Green, C. A., representative of United States at Conference 46, 55 

Remarks 227-228 

Gregg, Isaac, press correspondent on trip 504 

Gregory, Hon. Thomas Watt, representative of United States at Con- 
ference 46 

Grevstad, Hon. N. A., representative of United States at Conference 46, 68 

Group Committees. See Committees. 

Guaranty debt. See Debts. 

Guardia, Senor Dr. Mariano, Carazo : 

Chairman of Conference Committee, Costa Rica 57 

Delegate from Costa Rica 8, 24, 41, 57 

Honorary president of Conference 39 

Remarks 257 

Guatemala : 

Banking facilities 253, 416-417 

Commercial education 252 

Customs duties 252 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,61 

Foreign trade 417^18 

Group conference report 413-420 

Imports and exports 415 

Monetary situation 415-417 

Permanent Group Committee-! 530 

Postal system 252 

Practical demonstrations of industries recommended 252 

Railways, ownership of 417 

Recommendations to Conference 419-420 

Remarks relative to group report 259-260 

Report summarized 252 

Trade, effect of war on 415 

Transportation facilities 252-253 

Guthrie, Ambassador George W., advocates friendly relations 496 

H. 

Ham, Clifford D. : 

Conditions in Nicaragua, explanation of 433-434 

Delegate from Nicaragua 8,25,63 

Hamlin, Hon. Charles S. : 

Address 29, 76, 152-164 

Changes brought about by Federal reserve act 155-164 

Closer trade relations with foreign countries 163 

Commercial paper 159 

Elasticity of national-bank notes 157-15S, 162 

Federal advisory council, duties of ^ 161 



INDEX. 719 

Hamlin, Hon. Charles S. — Continued. 
Address — Continued. 

Federal Reserve Board — Page. 

Duties of_ 160-161 

Powers of 163 

Lack of cooperation between individual banks 159 

Management of Federal reserve banks 160 

National and State banks 156 

Refusal of credit to merchants and farmers 156 

Member of Committee on Uniformity of Laws 31, 70, 143 

Representative of United States at Conference 46, 55 

Hammond, Hon. John Hays: 
Member of — 

Committee on Uniformity of Laws 31, 70, 143, 207 

Permanent Group Committee 529 

Representative of United States at Conference 46 

Harding, Hon. W. P. J., representative of United States at Conference- 46, 65 

Hardy, Caldwell, representative of United States at Conference 46, 57 

Harper, Robert N., representative of United States at Conference 46, 57 

Harris, A. M. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 46, 62 

Harris, Hon. William J., representative of United States at Conference- 46, 69 

Harrison, Fairfax, member of Permanent Group Committee 530 

Hart, Francis R., representative of United States at Conference 46, 56 

Hassen, Hugh, in charge of transportation on trip 504 

Hastings, S. M. : 

Member of committee to visit South and Central America 528 

Representative of United States at Conference 46, 53, 207 

Heinl, Robert D. : 

In charge of press arrangements 504 

Tribute from Assistant Secretary of the Treasury Andrew J. Peters. 485 

Henderson, Mrs. John B., reception of members 80 

Henry, S. T., member of committee to visit South and Central America- 528 
Hepburn, Barton : 

Address - 178-181 

Member of — 

International High Commission 16,527 

Reception Committee 25 

Representative of United States at Conference 46,65 

Herr, B. M., member of Permanent Group Committee 530 

Herrera, Senor Dr. Carlos: 

Delegate from Guatemala 8,24,41,61 

Higginson, Senor Dr. Eduardo : 

Delegate 8, 25, 30, 42, 66 

Member of Committee on Transportation 30, 71 

Hollander, Prof. Jacob H. : 

Member of Permanent Group Committee 530 

Representative of United States at Conference 40,59 

Holliday, John H.. representative of United States at Conference., 46, 53 



720 INDEX. 

Honduras : Page. 

Banking situation 275, 424-425 

Conference committee 62 

Debt, interior and foreign 425 

Envoy extraordinary and minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43, 62 

Group conference report 421-429 

Inter-American markets 275, 427-428 

Merchant-marine facilities 428-429 

Monetary situation 424 

Permanent group committee 530 

Present banking situation 424-425 

Private enterprises, financing of 426—127 

Public finance 423-424, 426 

Public improvements, financing of 275, 425^26 

Report summarized 275-276 

Trade, effect of war on 275,423-424 

Transportation facilities 425, 428-429 

Ilorton, Elias Q., representative of United States at Conference 46, 54 

Howard, A. B., representative of United States at Conference 47, 64 

Hurley, Hon. Edward N. : 

Member of Committee on Transportation 30, 71, 152 

Representative of United States at Conference 47, 53 

I. 

Imhoff, C. H., representative of United States at Conference 47, 62 

Immigration (Ecuador) 579 

Imports and exports : 

Brazil 341-346 

Chile 573 

Colombia 368-369 

Guatemala 415 

Latin America 678 

Nicaragua _ 584 

Paraguay * 601-602 

Peru 609-610 

San Francisco 676 

Uruguay 645-64S 

Venezuela 464, 664, 672 

Industries: Guatemala, practical demonstrations recommended 252 

Ingle, William, representative of United States at conference 47,63 

Insurance state bank loan, Uruguny 652-653 

Inter-American Commission, Chile 251 

International commercial arbitration. See Arbitration. 
International commercial court : 

Suggestion that Committee on Uniformity of Laws take up ques- 
tion of 148 

To be appointed by Committee on Uniformity of Laws 30-31 

Sec also Committees: Committee on Uniformity of Laws. 
International Committee of Commercial Arbitration. See Committees. 



INDEX. 721 

Page. 

International Court, Committee on Establishment of. See Committees : 

Committee on Uniformity of Laws. 
International High Commission : 

Establishment urged by Secretary W. G. McAdoo 31, 291-292, 518-519 

Members — 

Appointment of 32 

List of 527 

Resolutions presented by Hon. John Bassett Moore regarding 289-290 

Organization of : 301-302 

International trade. See Commerce. 

International tribunal 198-199 

Itinerary of trip 81 

Izquierdo, Senor Dr. Luis : 

Address 96-98 

Chairman of Conference Committee, Chile 55 

Delegate from Chile 8, 24, 30, 41, 55 

Honorary vice president of Conference 39 

Member of — 

Committee on Transportation . 30, 71 

Committee on Uniformity of Laws : 31, 70, 142 

Official party on trip 503 



Jaffray, C. T., representative of United States at conference 47 

Jara Almonte de, J., group secretary for Argentina 52 

Jay, Pierre : 

Member of Reception Committee 25 

Representative of United States at conference 47, 61 

Jenks, Jeremiah W., member of Permanent Group Committee 531 

Jennings, Frederick B., member of Permanent Group Committee 530 

Jimenez. Senor Dr. Enrique, delegate from Dominican Republic 8, 24, 41, 59 

Jimenez, J. I., reply to President Wilson's cable 509 

Johnson, Alba B. : 

Member of Permanent Group Committee 530 

Representative of United States at conference . 47, 55 

Johnston, Archibald, representative of United States at conference 47, 55 

Jones, Arthur W 335 

Jones, De Witt Clinton, representative of United States at conference— 47, 62 

Jordan, G. G., representative of United States at conference 47, 59 

Joy, Benjamin, representative of United States at conference 47, 52 

K. 

Keith, Charles S., representative of United States at conference 47, 68 

Keith, John M. : 

Address 99 

Delegate from Costa Rica 8, 24, 41, 57 

Member of Committee on Uniformity of Laws 31, 70, 142 

Keith. Minor C, member of Permanent Group Committee 529 

Kelleher, Darnel, member of committee to visit South and Central 

America 528 

98257°— ] 5 46 



122 INDEX. 

Page. 

Kelly, N. B., representative of United States at conference •__ 47, 57 

Kent, F. I. : 

Member of Permanent Group Committee 530 

Representative of United States at conference 47, 60 

Kies, William S. : 

Address _ . 243-245 

Member of — 

Committee to visit South and Central America 528 

Permanent Group Committee 532 

Representative of United Suites at Conference 47, 54 

Kiler, Charles A., representative of United States at Conference 47, 57 

Kinley, David, member of Permanent Group Committee 529 

Kretz, George H., representative of United States at Conference 47, 66 

L. 

Lafayette, General, letter to Bolivar 667 

Lage, Frederico: 

Member of Permanent Group Committee 529 

Representative of United States at Conference 47, 54 

Lara, Senor Dr. Juan S. : 

Delegate from Guatemala 8, 24, 41, 61 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Official party on trip 503 

Latin America : 

Commerce ■. 203 

Development of 9 

Financiers invited to visit 236 

Import duties 678 

Publicity ,— 203 

Securities, listing of 258 

Steamship facilities 13 

Importance of having uniformity 15-16, 139 

See also Committees, Committee on Uniformity of Laws. 

Lee, Hon. Blair, speech to delegates 494 

Le Gendre, William C. : 

Address 243 

Amendment offered to Francis resolution 283 

Representative of United States at Conference 47, 68 

Libby, McNeil & Libby 498 

Lipe, W. H., member of Permanent Group Committee 530 

Llopis, Senor Don Gabriel: 

Member of official party on trip 503 

Secretary to Colombian delegation 56 

Loans r 

Argentina 554-555 

Bolivia 32S 

Chile 500 

Dominican Republic 395 

Foreign, remarks by Paul M. Warburg, on 172 

Peru 445 



INDEX. 723 

Loans — Continued. Page. 

Remarks by Mortimer L. Schiff 185, 186, 188 

Salvador 622 

Uruguay 652-653 

Loeb, William, jr. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 47, 58 

Lowell, J. Lawrence 502 

Luco. See Barros 508 

Lufkin, E. C 449 

Luitweiler, J. C-, Group secretary for Bolivia 53 

Luna, Seiior Dr. Samuel, honorary president of Conference 39 

Lurman, Theo. G., jr., Group secretary for Costa Rica 57 

Lyerly, Charles A., representative of United States at Conference 47, 69 



McAdoo, Hon. William Gibbs, Secretary of the Treasury 208, 527 

Addresses 27-28, 76, 113-119 

Announcements 76, 132-133, 141-142, 189, 194, 227, 233, 245, 249-250 

Appoints committee to receive delegates 25 

Argentina anniversary, remarks on 147-148 

Asks delegates to name members for Committee on Transportation- 149-150 

Authority to invite bankers of United States , 8 

Banquet to delegates 80, 469-^89 

Commercial credits 118 

Conclusion of Conference, remarks at 288-294 

Congratulated on success of Conference 259 

Consequences of European war 114 

Consideration of special bureau in Pan American Union 301-302 

Consideration of resolution on transportation 283-284 

Discussion of subjects, remarks relative to 138 

Establishment of branch banks 118 

Favors an annual conference 517-518 

Federal reserve act, remarks on 118 

General remarks 134, 136, 138, 139, 151-152, 181, 200, 208, 210, 255 

Greetings to delegates 193 

Group Conference Committees, remarks on 292-293 

Group reports, conclusion of 278 

International High Commission 18-17, 291-292 

Introduces delegates 91-109 

Introduction of President Woodrow Wilson 87 

Invitations to Conference 8 

Letters — 

To delegates 517-523 

Transmitting Proceedings of the Conference 5-20 

Luncheon to members 79 

Merchant Marine — 

Improvement advocated 520-522 

Reply relative to 144 

Opening remarks 9-20 

Panama Canal to establish new trade interests : 118 

Permanent Group Committees advisable 519-520 

Plan to divide Conference into groups 115 



724 INDEX. 

McAdoo, Hon. William Gibbs — Continued. Page, 

Postal facilities, improvement advocated 52,3 

Presides at opening of Conference 9, 75 

Questions suggested by 25-26, 35^8, 116-117 

Reception to delegates, announcement 76, 249 

Recommended that a permanent Committee on Transportation be 

appointed 11-12 

Requested to use influence in establishing new steamship lines and 

American banks 410 

Significance of Pan American Conference 113 

Suggestion that Committee on Uniformity of Laws take up question 

of international commercial court 148 

Summary of suggestions for carrying on work of Conference 19 

Tribute to — 

Hon. John Barrett 490 

Hon. Andrew J. Peters . 484 

Dr. Leo S. Rowe 484 

Toasts to Presidents of South and Central America 471 

Transportation report, discussion 288 

Tribute from — 

Ambassador da Gama 474 

Hon. Dudley Field Malone 488 

Hon. Andrew J. Peters 484 

Dr. Leo S. Rowe 486 

Urges establishment of International High Commission on Uniform 

Legislation 518-519 

Uruguayan proposal, remarks on . 236 

McChord, Joseph A., representative of United States at Conference 47, 60 

McCormick, Cyrus, member of Permanent Group Committee 528 

McCrosky, Jas. Warren, representative of United States at Conference. 47, 62 
McGuire, Constantine E. : 

Assistant to the Secretary General of International High Commis- 
sion 16, 527 

Group secretary for Salvador : 67 

McKeesport, Pa 496 

McQueen, H. C. : 

Member of Sub-Committee on Commerce 449 

Representative of United States at Conference 47,67 

Maddox, Robert F. : 

Member of Permanent Group Committee 531 

Representative of United States at Conference 47, 65 

Mahana, George S., member of Permanent Group Committee 532 

Major, Elliott W., welcome to delegates 497 

Malburn, Hon. Wm. P., representative of United States at Conference- _ 47, 61 
Malone, Hon. Dudley Field: 

Chairman of Reception Committee 25 

Speech to delegates at banquet 4S8-490 

Manning, W. E., member of Permanent Group Committee 531 

Marble, William A., member of Reception Committee .25 

Markets, Inter-American : 

Address of Dr. Suay on 208 

Basis of reciprocity advocated by Uruguay delegation 266 

Extension of 572-574 



INDEX. 725 

Markets, Inter-American — Continued. Page. 

Costa Rica 251, 375 

Dominican Republic 252, 397 

Ecuador 409^10 

Honduras 275, 427-428 

Salvador 633-634 

Uruguay i 692-694 

Venezuela _ 278, 465 

Marshall, W. H., member of Permanent Group Committee 530 

Martin, William McC, representative of United States at Conference 47, 65 

Martinez de Alva, Serlor Salvador. 

Group secretary for Chile 55 

Secretary interpreter on trip__ 504 

Meat products, Uruguay 646 

Meeker, Arthur, representative of United States at Conference 48, 66 

Melendez, Carlos, reply to President Wilson's cable 512-513 

Memoranda : 

Submitted by delegations — 

Chile 559-574 

Ecuador 575-580 

Panama 589-592 

Paraguay 593-603 

Peru 605-616 

Salvador 617 T 634 

Uruguay 635-654, 681-699 

Venezuela 655-672 

Submitted by — 

Dr. R. C. Aldao 535-550 

Dr. S. H. Pearson 551-557 

Dr. P. R. Cuadra , 581-587 

John Clausen 673-680 

Menocal, Mario G., reply to President Wilson's cable 509 

Merchant marine : 

Bids suggested in reports 12 

Bolivia 323 

Costa Rica 251, 376 

Cuba, good facilities 135 

Dominican Republic 397-399 

Ecuador 410-411 

Establishment necessary 9, 12, 13-14, 122, 209, 210, 255, 262-263 

Fast service desirable 149. 310-317, 543, 550 

Foreign registry ■ 243 

Government-owned ships, remarks by R. W. Babson 240 

Honduras 428-429 

Improvement recommended — 

Hon. Wm. G. McAdoo 520-522 

Dr. S. H. Pearson 143-144 

Hon. Wm. C. Redfield 127-128 

Dr. Gabriel Terra 150 

Panama 253, 438 

Paraguay 442 

.Salvador 451 

Seaman's bill, effect of 677 

Service to and from San Francisco 677 



726 INDEX. 

Merchant marine — Continued. Page. 

Subsidies, remarks by R. W. Babson 239 

Transportation rates in Ecuador 150-151 

United Fruit Company's lin«es, extension of 140 

Uruguay 455, 681-683 

Venezuela 278, 463-464, 666 

Meredith, E. T., representative of United States at Conference ' 4S, 56 

Mexico 23 

Miles, Basil : 

Appreciation of services 32, 200 

Assistant Secretary General of the Conference 72 

Tribute from Assistant Secretary of the Treasury Andrew J. Peters- 485 

Miller, Hon. Adolph C, representative of United States at Conference.. 48, 5S 

Miller, J. Z., jr., representative of United States at Conference 48, 64 

Mills, A. L., Member of Committee to visit South and Central America. 528 

Mineral resources: 

Bolivia 250. 321-322, 329 

Chile 563-564 

Colombia . 356-357 

Ecuador 579 

Paraguay 598-599 

Minotto, James, representative of United States at Conference 48, 61 

Mitchell, C. D. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 48, 66 

Money-order service, remarks of Postmaster General Burleson on 121 

Money-order system, Cuba, remarks of Dr. Desvernine y Galdos on 135 

Monetary situation : 

Bolivia 250, 324-325 

Chile * 251, 564-565 

Costa Rica 251,374 

Dominican Republic : 393-394 

Ecuador 1 404^05 

Guatemala 415-417 

Honduras 424 

Paraguay 441 

Salvador 630-631 

Monetary system : 

Uniformity in standard, remarks of C. A. Conant 214-215 

Salvador 621-622 

Venezuela 659-660 

Monetary unit: 

Adoption suggested 209 

Colombia 364 

Uruguay 455,684-687 

Montes, Ismael, reply to President Wilson's cable 507-50S 

Moore, Charles G., member of committee to visit South and Central 

America 528 

Moore, Hon. John Bassett : 

Group reports summarized 30, 250-256, 275-276, 277-278 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

International High Commission 16 

Remarks relative to committee report 237 



INDEX. 727 

Moore, Hon. John Bassett — Continued. Pag- 

Representative of United States at Conference 48, 54 

Resolutions offered by 289-290, 303 

Response to toast on behalf of United States representatives 478-484 

Vice chairman of International High Commission 527 

Morgan, J. Pierpont, representative of the United States at Con- 
ference 48, 54 

Morgan, William F., member of Reception Committee 25 

Morris & Co 49S 

Morron, John R., member of Permanent Group Committee 531 

Muchnic, Charles : 

Member of Permanent Group Committee 531 

Representative of United States at Conference 48, 56 

Mulford, H. K., member of Permanent Group Committee 531 

N. 

Naon, Ambassador Romulo S., reception to delegates 77 

National Association of Manufacturers, telegram from 194 

National-bank notes : 

Elasticity of . 157-158. 162 

Right to issue 155 

National debt. See Debts. 

National Salt Co. (Peru) 610 

Natural resources : 

Bolivia 250,321 

Brazil 338 

Colombia 356 

Ecuador 102 

Nicaragua 253. 260-261, 433-134 

Paraguay 106. 441 

Navigation : 

Bolivia 323 

Ecuador 579 

Navy. United States, naval auxiliaries for 14-15 

New Orleans, La., advantages received from Conference 262 

New York City : 

Board of estimate and apportionment, resolution 183-184 

Financial policy 183-184 

News service, need for betterment of 126 

Newton, Hon. Byrou R., representative of United States at Conference- 48. 57 

Niagara Falls, delegates' visit to 499-500 

Niagara Falls, Chamber of Commerce, luncheon to delegates 500 

Nicaragua : 

Agricultural resources 584 

Banks 583 

Conference committee 63 

Group Conference report 431^34 

Economic situation 583. 584 

Envoy Extraordinary and Minister Plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,63 

Explanation of conditions in '. 433-434 

Exports 584 



728 INDEX. 

Nicaragua — Continued. Page. 

Financial problems 253, 587 

Inflated currency 138-139 

Natural resources 253, 260-261, 433-434 

Permanent Group Committee 530 

Proposed treaty with United States, advantages of 260-261 

Public finances 586 

Eemarks relative to group report 260-263 

Report summarized 253 

Stock raising. 433 

Trade, effect of war on 584 

Transportation facilities 434, 585 

Treaty with United States proposed 253,434 

Nickerson, J. F., representative of United States at Conference 48, 67 

Nitrates, Chile, export duty on 251 

Norris, George W. : 
Member of — 

Committee on Transportation 30, 71, 152 

Permanent Group Committee 529 

Representative of United States at Conference 48, 64 

Norton, Charles D., representative of United States at Conference 48. 55 

Nnmsen, George H. : 
Member of — ■ 

Committee on Uniformity of Laws 31,70,143 

Permanent Group Committee 531 

Representative of United States at Conference 48, 63 

O. 

O'Brien, Hon. Edward C, representative of United States at Conference- 48, 68 
Ocana. See Sanchez. 
Olcott, Hon. J. Van Vechten : 

Address. 240-241 

Representative of United States at Conference 48,65 

O'Neil, J. F. : 

Member Permanent Group Committee 52S 

Representative of United States at Conference 48, 53 

O'Neil, Joseph H., member Permanent Group Committee „ 530 

Osborn, William H., representative of United States at Conference 48 

Osborne, Hon. John E., representative of United States at Conference 48 

Outerbridge, E. H., member of Reception Committee 25 

Owens, Dr. Clarence J., representative of United States at Conference.- 48, 69 

P. 

Paine, A. Y., jr., representative of United States at Conference 48 

Pan American Consular Association, luncheon to delegates 49S 

Pan American Finance Commission, plan of E. J. Fisher 210-212 

Pan American Financial Conference : 

Address by Hon. John Barrett 204 

Annual meeting favored by Secretary William G. McAdoo 517-518 

Appreciation by — 

Dr. Amaro Cavalcanti 2r>r>-257 

Dr. Desvernine y Gald6s 257-258 

Dr. Hector Velazquez 27i'>-277 



INDEX. 729 

Pan American Financial Conference — Continued. Page 

Appropriation for 7, 18, 19 

Honorary presidents 39 

Honorary vice presidents 39-40 

List of delegates 8,24-25 

Members of diplomatic corps invited to attend 43 

Official delegations 41-42 

Presiding officer 39 

Program 35-48 

Representatives of United States in attendance 44-55 

Success of group committees 519 

Successful results discussed by — 

Dr. Isaac Alzamora . 264-265 

Dr. Roberto Ancizar 257 

H. R. Eldridge 271-272 

Dr. Sanchez Ocana 259 

Trip of delegates ! 491-504 

Pan American States Association 240-241 

Pan American trade, mutual interest 196-197 

Pan American Union : 

Building placed at disposal of Conference 32, 490 

History 201-203 

Pan Americanism : 

Discussion by Dr. Pedro Cosio of • 266 

High ideals expressed by Dr. Pedro Rafael Rincones 272-273 

Panama : 

Appointment of High Commission in 16 

Banks and banking 253,437 

Economic conditions discussed by Dr. Aristides Arjona 264 

Envoy Extraordinary and Minister Plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43, 64 

Group Conference Committee 64 

Report 435^38 

Remarks relative to group report ._ 264 

Report summarized 253 

Memorandum submitted by delegation from 589-592 

Permanent Group Committee 530 

Railroad rates in 253,437 

Shipping facilities 253, 438 

Trade, effect of war on 591 

Transportation 253, 437-438 

Panama Canal : 

Commercial advantages to Colombia 354 

Commercial relations to be expanded througb ■ 97 

Effect on port of San Francisco 675 

Exemption of tolls 209 

Transportation between Panama and Colon 253 

Panama Railroad Co., freight rates 253 

Paraguay: 

Agricultural resources 597 

Arbitration for commercial disputes 276 

Banking facilities 276. 441, 600-601 

Conference Committee 65 



730 INDEX. 

Paraguay — Continued. Page 

Economic and financial condition 595-603 

Envoy Extraordinary and Minister Plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,65 

Financial situation 603 

Group conference report 439-442 

Imports and exports 601-602 

Memorandum submitted by delegation 593-603 

Merchant-marine facilities 442 

Mineral resources 598-599 

Monetary situation 441 

Natural resources 106, 441 

Permanent Group Committee 531 

Remarks relative to group report 264 

Report summarized 276 

Trade- 
Conditions in 442 

Effect of war on 441 

Transportation facilities 442 

Parcel post: 

Brazil 255 

Cuba 135. 251, 381. 623 

Remarks by Postmaster General Burleson on 120-121 

Parke, Davis & Co 499 

Parker, J. Brooks B. : 

Appreciation of services „ 32, 200 

Assistant secretary general of the Conference 72 

Assistant secretary general of International High Commission 16, 527 

Tribute from Assistant Secretary of the Treasury Andrew J. Peters. 485 

Parker, Walter: 
Member of — 

Committee to visit South and Central America 528 

Permanent Group Committee 529 

Representative of United States at Conference 48,63 

Parry, Hon. William H., representative of United States at Conference- 4S. GO 

Patchin, Robert H. : 
Member of — 

Committee to visit South and Central America 528 

Permanent Group Committee 531 

Representative of United States at Conference 48,65 

Pearson, Seilor Dr. Samuel Hale: 

Address 91-92 

Chairman of Conference Committee, Argentina 52 

Delegate from Argentina 8,24.30,41.52 

History of Argentine banks 555-557 

Honorary vice president of Conference 39 

Loans made to Argentina 554-555 

Member of — 

Committee on Transportation 30. 71 

Committee on Uniformity of Laws 31,70,142 

Finances of Argentina, memorandum on 133-134,553-557 



INDEX. 731 

Pearson, Senor Dr. Samuel Hale — Continued. Page. 

Merchant marine, improvement of '. 143-144 

Report submitted 301-302. 303-309, 313-31S 

Steamship lines, discussion relative to extension of 148-149 

Transportation, remarks on 13, 30, 278-279 

Pena, Senor Dr. Carlos Maria de : • 

Delegate from Uruguay 8, 25, 30, 42, 68 

Member of — 

Committee on Transportation 30, 71 

Committee on Uniformity of Laws 31, 70, 143 

Penfield, Walter S. : 

Group secretary for Panama 64 

Representative of United States at Conference 48, 64 

Penny, David H. G. : 

Member of Permanent Group Committee 530 

Representative of United States at Conference 48, 59 

Pepper, Charles M. : 

Member of Permanent Group Committee 528 

Representative of United States at Conference 48, 59 

Perez Triana, Senor Dr. Santiago : 

Address 98-99, 173-178 

Chairman of Conference Committee, Colombia 56 

Colombian debt, remarks on 135 

Delegate from Colombia 8,24,41,56 

Highest ideals of Pan Americanism 207, 210 

Honorary vice president of Conference 39 

Member of — 

Committee on Uniformity of Laws 31, 70, 142 

Official party on trip 503 

Replies to toasts 474,475-478,495,498,502 

Permanent Group Committees. See Committees. 

Perry, Marsden J., representative of United States at Conference 49, 61 

Peru : 

American banks, establishment of 277 

Appointment of High Commission in 16 

Banks and banking 265, 445, 611-613 

Conference committee 66 

Currency 614 

Envoy Extraordinary and Minister Plenipotentiary — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43,66 

Extension of local banking facilities advocated 265 

Finances and Commerce 607-610 

Foreign commerce 445, 614-615 

Group conference report 443-446 

Imports and exports 609-610 

International Commercial Arbitration indorsed 446 

Loans 445 

Memorandum submitted by the delegation from 605-616 

National debt 611 

National Salt Co 610 

National tax 610 

Permanent Group Committee 531 



732 INDEX. 

Peru — Continued. Page. 

Present situation in 277 

Pure food and drug laws . 278, 446 

Eemarks relative to group report 264-265 

Report summarized 277-278 

Trade, effect of war on ' 607 

Transportation — 

Facilities 446 

Improvement necessary 277 

Peruvian Steamship Co 150 

Peters, Hon. Andrew J. : 

Appreciation of services , 32, 200 

Breakfast tendered by 80 

Honorary vice president of Conference 39 

Presented with gold clock 502 

Representative of United States at Conference 49 

Speeches — 

At banquet 484-4S6 

On trip 498, 502 

Tribute from L. S. Rowe to 487 

Tribute paid to — 

L. S. Rowe 485 

Wm. F. Sands 485 

Basil Miles . 485 

J. S. Gittings, jr 485 

J. Brooks B. Parker 4S5 

Trip with delegates— 491-505 

Peynado, Seiior Dr. Francisco J. : 

Address 101 

Appreciation of Conference 258 

Chairman of Conference Committee, Dominican Republic 59 

Delegate from Dominican Republic 8, 24, 41, 59 

Educational campaign needed 136-137 

European war will result in increase of inter-American commerce-- 136 

Honorary vice president of Conference 40 

Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Official party on trip 503 

Recommendation to appoint committee to study postal conditions 137 

Philadelphia, Pa., visit of delegates • 494-495 

Phillips, Hon. William, representative of United States at Conference 49 

Pierson, Lewis E. : 

Member of Permanent Group Committee 531 

Representative of United States at Conference 49. 57 

Pitman, Alfred, press correspondent 504 

Pittsburgh, Pa., delegates visit to 495-496 

Plaza, Leonidas, reply to President Wilson's cable 510 

Plnza, Victorino de la: 

Cablegram to 147 

Cablegram from 193-194 

Reply to President Wilson's cable 507 

Political situation, Bolivia 323 

Porras, Belisario, reply to President Wilson's cnble 511-512 



INDEX. 733 

Postal facilities: Page. 

Costa Rica 376 

Cuba 251, 390 

Dominican Republic 252, 398-399 

Ecuador 578 

Guatemala 252 

Improvement advocated by Secretary McAdoo 523 

Latin America 209 

Rates discussed by Secretary Burleson 119-120 

Uruguay 457, 691-692 

Venezuela 27S, 464 

Postal laws, resolution of Dominican Republic 399 

Potter, W. C. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 49, 56 

Pratt, Sereno S., member of Reception Committee 25 

Preston, Hon. James H., speech to delegates 494 

Price, Theodore H, representative of United States at Conference 49, 69 

Private enterprises, financing of : 

Chile 571-572 

Colombia 365-367 

Costa Rica 251, 374-375 

Dominican Republic 252, 395-396 

Ecuador 407-409 

Honduras 426-427 

Salvador 632-633 

Program 35-48 

Public debts. See Debts. 

Public finance : 

Argentina 553-557 

Chile - 561-562 

Costa Rica 373-374 

Dominican Republic 393-394 

Ecuador 403 

England 166-167 

Honduras 423^24 

Nicaragua 5S6 

Paraguay 603 

Peru 607-610 

Questions for consideration relative to 116 

Salvador 629-630 

Uruguay 648-651, 687-6S9 

Public improvements, financing of : 

Bolivia - 325-326 

Chile 567-571 

Costa Rica 374 

Dominican Republic 395-396 

Ecuador 407 

Honduras 425-426 

Salvador 632-633 

Venezuela . 467 

Public utilities, Venezuela 466 



734 INDEX. 

Q. 

Page 

Questions suggested by Secretary of the Treasury 25-26, 35-48, 116-117 

Quihonez, Sefior Dr. Alfonso : 

Address 107-108 

Appreciation of honors shown to Salvador 265-266 

Chairman of Conference Committee, Salvador 67 

Delegate from Salvador 8,25,42,67 

Member of Committee on Uniformity of Laws 31, 70, 143 

Reply to Mayor Preston 494 

Honorary vice president of Conference 40 

R. 
Railways : 

Bolivia 250, 322-323, 328-329 

Guatemala 417 

Panama 253, 437 

Remarks on, by Dr. Ignacio Calderon 256 

Venezuela 467 

Raskob, John J. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference ' 49, 55 

Reciprocity treaty between Cuba and the United States 251, 379, 3S4 

Redfield, Hon. William Cox: 

Address 76, 122-132 

Banking facilities 130 

Brusque manners in business 125 

Cables, necessity for 127 

Extended credits (long time) 124-125 

Licenses for commercial travelers 126 

Merchant marine, need of improvement 127-12S 

News service, need for better 126 

Chairman of Committee on Uniformity of Laws 31, 70, 142 

Reed, William A., member of official party on trip 503 

Reports : 

Adopted — 

Transportation Committee 287-28S 

Uniformity of Laws Committee 287 

Committees — 

Transportation 278-279,307 

Uniformity of laws 2S4-2S6, 301 

Group Conference Committee — 

Argentina 315-318 

Bolivia 321-331 

Brazil 333-346 

Chile 349-350 

Colombia 3&1-369 

Costa Rica 371-376 

Cuba 379-390 

Dominican Republic 391-399 ' 

Ecuador 401-411 

Guatemala 413-420 

Honduras 421-429 

Nicaragua 431^134 



index. 735 

Reports — Continued. 

Group Conference Committee — Continued. Page. 

Panama 435-438 

Paraguay 439^42 

Peru 443-446 

Remarks in connection with 255-263, 271-273, 276-277 

Reports 311-168 

Salvador 447^t5l 

Summary 250-255, 273-276, 277-278 

Uruguay 453-159 

Venezuela 463^68 

Revenue : 

Bolivia 330-331 

Honduras 8 426 

Paraguay 441 

Reynolds, George M. : 

Member of International High Commission 16 

Representative of United States at Conference 49, 60 

Speech to delegates 498 

Reynolds, Hon. James B., representative of United States at Confer- 
ence 49, 64 

Rhett, R. Goodwin : 
Member of — 

Committee on Transportation 30, 71, 152 

Permanent Group Committee "531 

Representative of United States at Conference 49, 59 

Rhoads, Charles J., representative of United States at Conference 49, 58 

Rice, E. W., jr. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference 49, 54 

Rich, John H., representative of United States at Conference 49, 57 

Richards, George H. : 

Member of Permanent Group Committee 528 

Representative of United States at Conference 49, 53 

Richling, Senor JosS, secretary of delegation, Uruguay 68 

Rincones, Senor Dr. Pedro Rafael : 

Address 109 

Chairman of Conference Committee, Venezuela 69 

Delegate from Venezuela 8, 25, 42, 69 

High ideals of Pan Americanism 272-273 

Honorary vice president of Conference 40 

Member of Committee on Uniformity of Laws 31,70,143 

Ringe, H. Ralph, group secretary for Venezuela 69 

Rivera Rosas, Luis, secretary interpreter on trip 504 

Rodriguez, Genaro Silva, group secretary, Uruguay 68 

Rojas, Senor Dr. Casto, honorary president of Conference 39 

Root, Hon. Elihu, work acknowledged by Latin America 106 

Rossell, John S., representative of United States at Conference 49, 63 

Rovensky, J. E., representative of United States at Conference 49, 6S 

Rowe, Leo S. : 

Announcements 189-190, 206. 227, 234, 271 

Remarks 133, 193, 194, 233-234, 249, 271, 272 

Report 23-33 

Secretary General of Pan American Conference 72. 96 



736 INDEX. 

Rowe, Leo S. — Continued. Page. 

International High Commission 16, 527 

Speech at banquet 486-48S 

Rowe, W. S. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 49,67 

Rubber, important product in Bolivia 250, 322 

Rublee. Hon. George, representative of United States at Conference 49, 6S 

Ruperti, J. : 

Member of Permanent Group Committee 530 

Representative of United States at Conference 49, 61 

Ryan, John D., representative of United States at Conference 49, 55 

Sabin, Charles H., member of Permanent Group Committee 529 

Sachs, Samuel: 

Member of Permanent Group Committee 531 

Representative of United States at Conference 49, 69 

S. 

St. Louis, Mo., delegates visit 497 

Salesman's tax. See Samples. 

Salt Mines, Peru 610 

Salvador : 

Banks and banking „___ 253, 449^50, 624, 631-632 

Commerce 253, 451 

Commercial credit 253, 619-620 

Commercial treaties : 620-621 

Envoy Extraordinary and Minister plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43, 67 

Group Conference committee 67 

Group Conference report 447-451 

Inter-American markets _- 633-634 

Loans 622 

Memoranda submitted by delegation - 617-634 

Merchant marine 451 

Monetary system 621-622, 630-631 

Packing 624 

Parcel post 623 

Permanent Group Committee 531 

Postal tariffs 622 

Private enterprises, financing of 632-633 

Public finances 629-630 

Public improvements, financing of 632-633 

Recommendations of delegation 624 

Remarks relative to group report 265-266 

Report summarized 253 

Trade, effect of war on 529 

Transportation facilities 450-451, 623 

Weights and measures 623 

Samples : 

Taxes on salesmen and samples 242, 301 

Cuba 251, 382, 465 

Ecuador 411 

Remarks of Dr. Ignacio Calderon on 255 



INDEX. 737 

Sanchez Ocafia, Sefior Dr. Victor: Page. 

Address 103 

Chairman of conference committee 61 

Delegate from Guatemala 8,24,41,81 

Remarks on success of Conference 259 

Sands, William Franklin: 

Appreciation of services 32, 200, 485 

Assistant secretary general 72 

Member of official party on trip 502 

Tribute from Assistant Secretary of the Treasury Andrew J. 

Peters 485 

Saunders, W. L. : 
Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Permanent Group Committee 531 

Representative of United States at Conference 49, 59 

Schaerer, Eduardo, reply to President Wilson's cable 512 

Schenectady, N. Y., delegates visit 500-501 

Schiff, Jacob H., member of Reception Committee 25 

Schiff, Mortimer L. : 

Address 181-189 

Government finance '. 183 

International financing 182 

Loans 185, 186, 188 

Policy of New York City 183-184 

Securities 184-186 

Member of Permanent Group Committee 529 

Representative of United States at Conference 49,52 

Schmidt, George P., representative of United States at Conference 49, 52 

Schools. See Commercial education. 

Schoonmaker, S. L. : 

Member of Permanent Group Committee 531 

Representative of United States at Conference 49, 52 

Scofield, Kendrick, press correspondent on trip 504 

Seaman's bill. See Merchant Marine. 

Secretary General Pan American Financial Conference. See Rowe, 
Dr. Leo S. 

Secretary of the Treasury. See McAdoo, Hon. William Gibbs. 

Securities : 

Chile, bonded warehouses as 251 

Ecuador 577 

Listing of Latin American 258 

Remarks by Mortimer L. Schiff on . 184-186 

Seligman, Isaac N. : . 

Member of Permanent Group Committee 532 

Representative of United States at Conference 50 

Shapleigh, A. L., representative of United States at Conference 50, 61 

Shaw, Henry 497 

Shepherd, W. R., member of Permanent Group Committee 529 

Sherrill, Hon. Charles H. : 

Address 237-238 

Representative of United States at Conference 50. 52 

Sherwell, G. A., group secretary for Dominican Republic , 59 

98257°— 15— 47 



738 INDEX. 

Shipping facilities. See Merchant marine. Page. 
Shirley, James J. : 

Member of committee to visit South and Central America 528 

Representative of United States at Conference 50, 68 

Silver market 227 

Simmons, Wallace D. : 

Member of Permanent Group Committee 529 

Representative of United States at Conference 50, 56 

Singer, Bernard . 498 

Smith, Charles E. W., representative of United States at Conference 50, 52 

Smith, Hon. William Alden 499 

Solberg, Senor Juan A., secretary of delegation from Cuba 58 

Special Committee in Charge of Visit of American Financiers, etc. See 
Committees. 

Speyer, James, representative of United States at Conference 50, 53 

Steamship lines. See Merchant marine. 

Stetson, John B ; 495 

Stock raising: 

Argentina 274 

Bolivia 250,322 

Colombia 357 

Nicaragua 433 

Uruguay 

Stone, Hon. William J 8 

Storrow, James J., representative of United States at Conference 50, 53 

Straight, Willard D. : 
Member of — 

Committee on Uniformity of Laws 31, 70, 143 

Committee to visit South and Central America 528 

Permanent Group Committee 528 

Reception Committee 25 

Representative of United States at Conference 50, 56 

Strauss Sefior Dr. Albert, delegate from Nicaragua 8,25.42,63 

Strong, Benjamin: 
Member of — 

Committee on Uniformity of Laws 31, 70, 148, 193 

Reception Committee 25 

Representative of United States at Conference 50.62 

Suay, Senor Dr. Jose E. : 

Address 207-210 

Delegate from Salvador 8,25.42,67 

Subsidies. See Merchant marine. 

Sulzberger, G. F., representative of United States at Conference 50. 52 

Sulzberger & Sons 498 

Sutter, Charles S., representative of United States at Conference 50, 54 

Swift & Co 49S 

Swiggett, Dr. Glen L., representative of United States at Conference™ 50, 61 

T. 
Tariff: 

Guatemala 252 

Postal 622 

Samples 242 

Uruguay 457 



INDEX. 739 

Taxes : Page. 

Abolishment on navigation, etc., advocated by Dr. Gabriel Terra 150 

Ecuador 411 

Peru 610 

Uruguay 457, 696-699 

Venezuela 465 

Taylor, G. C, member of Permanent Group Committee 530 

Tedcastle, A. W. : 

Address 242 

Representative of United States at Conference 50, 60 

Telegraphic sendee : 

Argentina 273, 317 

Brazil . 255 

Ecuador 578 

Rates discussed by Dr. Ricardo C. Aldao : 273 

Uruguay 253, 455 

Telephone service, Ecuador 578 

Terra, Senor Dr. Gabriel : 

Delegate from Uruguay 8,25,30,42,68 

Member of Committee on Transportation 30, 71 

Urges improvement of merchant marine 150 

Thayer, H. B., member of Permanent Group Committee 531 

Thomas, E. P.: 

Member of Permanent Group Committee 532 

Representative of United States at Conference 50, 54 

Thompson, Hon. Arthur R. : 

Representative of United States at Conference 50, 63 

Thompson, Hon. William H 497-498 

Timber : 

Bolivia 250. 322 

Colombia 357, 358 

Paraguay 

Tobacco : 

Cuban, duty on 251 

Dominican Republic, duty on 252 

Toby, George P., representative of United States at Conference 50, 62 

Townley, Calvert, representative of United States at Conference 50, 68 

Trade. See Commerce. 

Trade-marks : 

Brazil recommends protection for 254 

Ecuador 579 

Uruguay 458-459 

Transportation : 

Argentina 315, 316-317 

Bolivia 250. 323 

Colombia 367-368 

Costa Rica 251, 376 

Cuba 381 

Ecuador 150-151, 410-411 

Guatemala 252-253 

Honduras. 428-429 

Improvement necessary , 277 

Nicaragua 434, 585 



740 INDEX. 

Transportation — Continued. Page. 

Panama 437-438 

Paraguay 442 

Peru 44(3 

Remarks by — 

Dr. R. C. Aldao 273-274 

Hon. David R. Francis 281-283, 288 

Dr. Samuel Hale 278-279 

Hon. Wm. G. McAdoo 288 

Dr. Suay 208-209 

Report adopted 2S7-2S8 

Resolution by Hon. David R. Francis on 283 

Salvador. 450-451, 623 

Transportation and Communication, General Committee on. See Com- 
mittees. 

Traveling agents, Ecuador 578 

Travieso, Hon. Martin, representative of United States at Conference- _ 50, 60 

Treaties. See Commercial treaties. 

Trip taken by delegates, with list of members 491-505 

TJ. 

Uniformity of commercial law. See Commercial law. 

Uniformity of laws, report adopted on 287 

Uniformity of Laws Committee. See Committees. 

United Fruit Co 149 

United States: 

Ranking laws 261-262 

Reciprocity treaty with Cuba 251, 379-384 

Representatives of. 29 

Steamship facilities 13, 14 

Trade relations with Cuba 3S4 

Treaty proposed with Nicaragua.., 253, 260-261, 263-264, 434 

Untermyer, Samuel : 
Member of — 

Committee on Uniformity of Laws 31. 70, 143 

International High Commission : 16, 527 

Representative of United States at Conference 50 

Uruguay : 

Banks 253, 456, 643-644, 645 

Cable service 684 

Commercial credit 253, 456, 6S9-691 

Commercial education 253, 457. 695-696 

Conference Committee 6S 

Economic measures as result of war 641-644 

Envoy Extraordinary and Minister Plenipotentiary of — 

Invited to attend Conference as special guest of the Secretary 

of the Treasury 43, 6S 

Exchange and arbitration 6S4-6S7. 

Financial situation 648-651. 687-689 

Foreign trade 644 

Government property 653-654 

Group conference report 453-459,681-699 

Hides 646-647 



INDEX. 741 

Uruguay — Continued. Page. 

Imports and exports 645-648 

Inter-American markets 266, 692-694 

Interchange of financial credit information urged 271-272 

Maritime transportation 681-683 

Meat products 646 

Memoranda submitted by delegation 635-654, 681-699 

Merchant Marine facilities 455 

Monetary Unit 455, 684-687 

Permanent Group Committee 531 

Postal facilities 457, 691-692 

Proposal for a tour by North Americans 235-236 

Public debt 651-652, 653 

Remarks relative to group report 266, 271-272 

Report summarized 253-254 

Tariff arrangements 457 

Taxation, system of 457, 696-699 

Telegraphic service 253, 455 

Topics suggested by delegation 637 

Trade — 

Effect of war on 639-654 

With United States 645 

Trade-marks, protection of . 458-459 

Weights and measures, system of 253, 455, 683 

Wool 646 

V. 

Van Antwerp, William C, member of Reception Committee 25 

Vanderlip, Frank A. : 

Branch banks and the Federal reserve act 140-41 

Central Commercial Agency indorsed by 256 

Member of Reception Committee 25 

Representative of United States at Conference 50, 52 

Velazquez, Sefior Dr. Hector: 

Address 105-108 

Remarks on results of Conference 276-277 

Chairman of Conference Committee, Paraguay 65 

Delegate from Paraguay 8, 25, 42, 65 

Honorary vice president of Conference 40 

Velez, Senor Dr. Jorge, honorary president of Conference 39 

Venezuela : 

Banks 659 

Commerce . 662-666 

Comparison of American and European trade 663-665 

Credits 465, 665 

Economic conditions 670, 671 

Effect of European War on 658-659 

Envoy Extraordinary and Minister Plenipotentiary of, invited to 
attend Conference as special guest of the Secretary of the 

Treasury 43, 69 

Exports from port of New York 672 

Finances 467-468, 660-661, 668-669 

Foreign trade 46 4 



742 INDEX. 

Venezuela — Continued. Page. 

General trade during fiscal year 1913-14 670-671 

Group Conference Committee . 69 

Group Conference report 461-468 

Imports and exports 464, 664, 672 

Inter-American markets . 278, 465 

International Arbitration Courts 466 

Memorandum submitted by delegation 655-672 

Merchant marine 278. 463-464, 666 

Monetary system 659-660 

Permanent Group Committee 531 

Postal facilities 278, 464 

Public improvements ^_ 467 

Public utilities 466 

Railroads . 467 

Remarks relative to group report 272-273 

Report of minister of finance 668-869 

Report summarized , 278 

Trade — 

Effect of war on : 658-659 

Statistics 671 

Vergara Bulnes, Senor Dr. Gonzalo : 

Addresses 495, 502 

Delegate from Chile 8,12,24,30,41,55 

Member of — 

Committee on Transportation 30, 71 

Official party on trip 503 

Merchant marine, remarks on 12, 149 

Viera, Feliciano, reply to President Wilson's cable 513 

Villamil, Senor Dr. V. : 

Delegate from Argentina and representative of the Buenos Aires 

Chamber of Commerce 8, 24, 30, 41, 52 

Member of Committee on Transportation 30, 71 

Villanueva, Senor Dr. Augusto. 

Delegate from Chile 8,24,30,41,55 

Member of — 

Committee on Transportation 30, 71 

Official party on trip 503 

Villaran, Senor Dr. Luis Felipe, honorary president . 39 

Virginia 494 

Vogel, Martin, vice chairman of Welcome Committee _ 25 

W. 

Wade, F. J., representative of United States at Conference 50, 64 

Walsh, Hon. David I 502 

War. European: 

Effect on trade — 

Bolivia 32S 

Chile 562 

Colombia 353, 360-366 

Costa Rica 373 

Cuba 385-387 



INDEX. 743 

War, European — Continued. 

Effect on trade— Page. 

Dominican Republic 393, 396 

Guatemala 415 

Honduras 275,423^24 

Nicaragua 584 

Panama 591 

Paraguay 441 

Peru 607 

Salvador 629 

Uruguay 639-654 

Venezuela 658-659 

Effects on finance 165 

Result will be to increase inter- American commerce 136 

Warburg, Hon. Paul M. : 

Address 76, 165-173 

Federal reserve banks, history of 168-171 

Financial dependence not to be placed on single nation 168 

Financial independence of United States 173 

Financial situation in England 166-167 

Financial structure of a country 171 

Foreign loans 172 

Future financial course of American nations 165 

Member of subcommittee on banking 335 

Short and long credit 168, 171 

Representative of United States at Conference 50, 54 

Ward, Cabot, member of Reception Committee - 25 

Warden, Charles W., representative of United States at Conference — 50, 61 
Warfield, Hon. Edwin: 

Member of committee to visit South and Central America 528 

Representative of United States at Conference 50, 59 

Warren, Charles B., representative of United States at Conference — 50, 69, 499 

Weeks, Hon. John W 502 

Weights and measures: 

Metric system 209 

Salvador ._ 623 

Uruguay 253,455,683 

Wells, Rolla, representative of United States at Conference 50, 64 

Wexler, Sol: 

Member of — 

Committee on Transportation 30, 71, 193 

Permanent Group Committee 531 

Remarks 260-261 

Representative of United States at Conference 51, 63 

Wheeler, Harry A. : 
Member of — 

Committee on Transportation 30, 71. 152 

Permanent Group Committee 532 

Representative of United States at Conference 51.68 

White, J. G. : 
Member of — 

Committee on Transportation 30, 71, 152 

Permanent Group Committee 530 

Representative of United States at Conference 51, 52 



744 index. 

White, Dr. William Wallace: Page. 

Delegate from Paraguay 8, 25, 42, 65. 106 

Member of Committee on Uniformity of Laws 31, 70, 143 

Remarks 264 

White House, reception held for delegates 249 

Wiggin, A. H. : 

Member of Reception Committee 25 

Representative of United States at Conference 51. 60 

Wilford, Senor W. R., secretary of delegation, Panama 64 

Williams, Hon. John Skelton, representative of United States at Con- 
ference 51 

Williams, R. Lancaster: 

Member of Permanent Group Committee 529 

Representative of United States at Conference 51, 69 

Willis, H. Parker, representative of United States at Conference 51 

Wilson, Hon. William B., representative of United States at Conference- 51 

Wilson, Dr. William P. : 

Member of Permanent Group Committee 532 

Representative of United States at Conference 51, 67 

Wilson, President Woodrow : 

Address 75, 87-89 

Cable correspondence with Latin-American Presidents ; 505-513 

Reception to delegates _. 76, 249 

Wing, Daniel G. : 

Member of Permament Group Committee 532 

Representative of United States at Conference 51, 54 

Wood, Edward Randolph, representative of United States at Conference- 51, 63 

Woodin, William E., member of Permanent Group Committee . 530 

Woodward, William, member of Reception Committee 25 

Woolley, Hon. Robert W. : 

Member of Committee on Uniformity of Laws 31, 70, 143. 207 

Representative of United States at Conference 51 

Y. 

Yanes, Francisco J., representative of United States at Conference 51, 69 



Zayas y Adan, Senor Dr. Octavio : 

Delegate from Cuba 8, 24, 41, 58 

Member of official party on trip 503 

Zimmerman, John. E, representative of the Buenos Aires Chamber of 

Commerce, member of Committee on Transportation 30 

Zubizarreta, Senor Dr. Jer6nimo. honorary president 39 



o 



